The short-term model was overbought yesterday, but there was no clear resistance in sight until 110 on SPY that I saw, so I did not want to recommend an inverse ETF trade. Also, with many signs of bottoming behavior I didn't want to get caught in the middle of a larger trend shift. Today the model came back just out of overbought territory and is far from oversold currently.
Today has changed the picture some as for how I interpret likely scenarios from here. I see a likely target on SPY as 88.00. Also, today's exhaustion type gap and bearish candlestick gives a good stop loss point and sign of at least some likely market weakness to come.
Without all the details, here is the trade recommendation:
Buy SDS with a market order tomorrow morning (10/15/08).
Pete
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