ProShares UltraShort S&P 500 (SDS) — This exchange-traded fund (ETF) seeks daily investment results, before fees and expenses, that correspond to twice the inverse of the daily performance of the S&P 500 Index (SPX). The fund normally invests 80% of its assets in financial instruments with economic characteristics that should be inverse to those of the S&P 500.
On Jan. 28, at $36.41, I said, “If the S&P 500 fails to hold above 1,080 to 1,085, then SDS could provide traders with a quick profit as the index falls.
“The target for a trade is $40 but, in the event of a major market failure, $45 should be attainable.
“However, it would be wise to place a stop-loss at $34 and consider a day trade if it becomes available, since there appears to be evidence that longer-term trades in this leveraged ETF do not fully track the market.”
Our stop-loss was not executed and recent market weakness encourages new short positions. The target is unchanged at $40 to $45.
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