Friday may have marked a momentum low in Breadth. It would now be typical to see the S&P trade below Friday’s low before any significant retracement and before before a larger rally occurs.
The Proshares UltraShort S&P ETF is one instrument that allows traders to take a position on the short side of the market. If our present working assumption is correct, this contract should trade to below Friday’s highs to one degree or another, and soon. This idea is invalidated if the S&P takes out Friday’s high without first taking out Friday’s low.
