Think the S&P Is Near a Top? Try This ETF!

10/28/2009 12:01 am EST

Focus: ETFS

UltraShort S&P 500 ProShares (SDS) - This exchange traded fund (ETF) seeks daily investment results, before fees and expenses, that correspond to the inverse of the daily performance of the S&P 500 (SPX). The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index.

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We have regularly reviewed the SDS in the Trade of the Day, pointing to a number of buying opportunities over the course of the bear market. But since the market's turn up, this inverse ETF has not been on our list. 

This ETF is a good hedge against a declining market or one that is entering a long period of consolidation. 

The trading target for SDS is $43, but if the broad market stalls, it could easily trade into the $50s.  

By Sam Collins of

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