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November 19, 2008
Trade of the Day: Ride S&P's Slide with SDS
February 28, 2008By Sam Collins
UltraShort S&P 500 ProShares (SDS) -- This Exchange-Trade Fund (ETF) seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the S&P 500 index (SPX).
The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. On Feb. 6, with SDS at $54.97, the Trade of the Day said, "For those with the fortitude and speculative bent for shorting, but who want to avoid some of the risks and costs of a short sale, the SDS might provide a trade of another 8-10 points from yesterday's close. And if the S&P 500 breaks below the January lows, it could result in a longer-term high-percentage return."
The S&P 500 didn't break to new lows but instead rallied and we took no new positions. Now, however, the S&P seems to be faltering and one of our Collins Bollinger Reversal internal signals was triggered yesterday. A trade from $60 to $67 may be possible
Sam Collins is ChangeWave's Chief Technical Analyst and a Registered Investment Adviser who manages portfolios for a fee. He can be reached at samailc@cox.net.
