Want to see a financial instrument that’s been carving out a series of higher highs and higher lows later, and has enjoyed a 15% appreciation since early August? Believe it or not, it’s that poor old battered beast we haven’t spoken about in years, the double-bearish ETF SRS:
To be sure, SRS has been viciously destroyed for years now, having peaked on a split-adjusted basis at $16,408.77 (yes, I’m serious) and presently trading at a level 99.8% lower than that. All the same, as my post earlier today about softening Palo Alto house prices suggested, we may well be past the peak of this particular bubble.
Damn this market. Every time we see a little bit of weakness, it’s still getting bought up. This morning, we opened down over 12 points. As I type this, it’s pushing against the selling, having trimmed its loss down to merely 8. It’s getting quite exasperating, because we need to cut through the entire “drop zone” I’ve tinted in green below to reach the promised land (which is looking not-particularly-promised), shown with the support line.
For the longest time, I got emails from Zillow telling me, month after month, how my house was appreciating in value here in my beloved Palo Alto.
Recently, though, there’s been a bit of a change:
The funny thing is that the amount it has decreased in value – about $540,000 – is precisely what I paid for the entire house way back when I originally bought it.
Today is the third day on the three day rule and bears can trigger the rule with a close today at 2134 or below, approximately 2168 on ES. That was tested at the low today and is holding as support so far. Bears have dominated the closes recently, so we may not know for sure until the close. If the rule triggers then a lower low on this retracement before a new ATH is almost certain. If the rule doesn’t trigger I’ll be getting significantly more doubtful about lower lows. With ES at 2135.50 at the time of writing I’m leaning 65/35 in favor of the bear side. SPX daily 5dma chart: