The S&P 500 has formed a bearish ascending wedge. I initiated shorts today as the markets turned down near resistance at the 877 level. This pattern should play itself out over the next two weeks with a return back to the beginning of the formation near 780, also the 50% retracement level. 800 may be an area to consider taking some profits, as it may serve as a psychological level of importance and is also the 38% retracement. I will be playing this trade by buying the SDS and shorting SSO. I will also look for relativeley weak stocks or stocks with good risk to reward to the short side. Stay tuned to see how this develops.
Where are the rest of my pattern traders? Any comments?
Per the post above, please see this chart.