The Direxion Daily S&P 500 Bear 1X Shares ETF ( SPDN) is a relatively new security. In fact, it has spent a large part of its trading history in a downward path as stock prices have mostly risen the past few years.
This is an inverse ETF and its share price should rally when the S&P 500 declines. My top-down view of stock prices is bearish and I look for a significant move lower into 2024.
Let's see how I would trade the SPDN anticipating a stock-market decline. 
In this daily bar chart of SPDN, below, I see a positive-looking setup. Prices are now trading above the 50-day moving average line but below the declining 200-day moving average line.
The trading volume shows an increase in activity since June and may be the action of institutional investors hedging. The daily On-Balance-Volume (OBV) line shows an increase beginning in early August and suggests that buyers of SPDN have become more aggressive.
The 12-day price momentum study in the lower panel shows a pattern of higher lows from June to September even though prices made lower lows into late July. This is a bullish divergence and could be foreshadowing a rally in the weeks ahead.
In the weekly Japanese candlestick chart of SPDN, below, I can see that share prices could be making a large double-bottom pattern as prices hold the $14 area -- the same low as in late 2021. SPDN trades below the declining 40-week moving average line but this line may be tested in the weeks ahead.
The weekly OBV line shows an uptick and the 12-week price momentum study shows us a bullish divergence on this time frame.
In this daily Point and Figure chart of SPDN, below, I can see that the stock reached a downside price target in the $15 area.
In the next Point and Figure chart of SPDN, below, I can see that prices have reached a downside price target in the $15 area. This chart shows that prices are making a higher low when compared to early 2022.
Bottom-line strategy: Regular readers of Kamich's Korner may have noticed that since early August I have been writing about more "avoids" than "buys." This reflects my bearish top-down view of the marketplace.
If I am right about the S&P 500 declining into 2024 then SPDN should stage a significant advance.
