Is The SDS Providing Clues About An Approaching Market Peak?
Purely from a technical perspective, the pattern carved out by the ProShares UltraShort S&P500 (SDS) since its July 24 high at 16.38 has taken the form of a declining wedge formation, which when all is said and done, represents a "trend-ender," ahead of a powerful directional reversal.
Of course, the $64,000 question is "where's THE END?"
In terms of the enclosed SDS pattern, the development of glaring momentum divergences after its July 27 low at 14.88, supports the supposition that all the action after July 27, in fact, is the final phase of the Declining Wedge Formation, and that yesterday’s low at 14.46 could be the low of the pattern.
That said, to get confirmation that the pattern is complete on the downside, the SDS must climb and sustain above 14.72-14.77, otherwise, a series of unconfirmed and marginal lower-lows could, and probably will continue, as the pattern exhausts itself on the downside-- prior to a violent reversal.