What is this? The S&P500 is down 1.5% intra-day? Do my eyes deceive me? How could this be possible?

Yes, it is true the S&P500 is off by more than 1%, and if my memory serves me correctly, this is the first pullback of more than 1% in over 2 months. But for those short equities, like me, let's face it, there is still a lot of work to do. I am sure the dip buyers are lurking.

Look at an intra day 60 minute bar chart (figure 1) of the Ultra Short S&P500 ProShares (symbol: SDS). This is a 2 times leverage product that moves inverse to the S&P500. The black dots are key pivot points for intra day charts. Remember, key pivot points serve as areas of support and resistance.

Figure 1. SDS/ 60 minute

Today's stunning (yet so far meaningless) reversal has actually pierced a resistance level (somewhat emphatically) at 29.46. What a surprise. In this bullish run, other key levels have been penetrated but prices never really took off higher, so let's see how next week unfolds. Levels of resistance are noted on the chart, and I would consider it significant if the SDS could make it over the next resistance level at 30.82.

Remember, reversals (or changes in trends) start with baby steps, and if you are short equities, today you are given new life, but I would hardly say we are off and running yet. Baby steps.

In the ARL Advisers' Real Time Portfolio, I am long SDS. In other words, I am betting against equities.