Sell XIV but buy SDS now

This is a typical market bipolar mood swing often seen at the extreme situation. As I said a week ago when there was kind of extreme depression that buying XIV would likely make you some quick money, it shot up 20% within days. Now XIV has moved up substantially along with a fast decline of VIX that is now at about 16, the easy money with XIV is gone. I have already cashed out my XIV for about a 20% short-term profit. As it stands now, the market has suddenly become too much euphoric. It is simply too much overbought! Yes, I believe the market will move up further in the next few months with a strong year end rally but the normal course of moving up from the bottom should not be a straight line up. Given how fast the market has moved up within days, very likely it will come down again to test its recent low before finally finishing its bottoming process. This is just how the market works.

Now it is the time to sell XIV but buy SDS if you want to trade for extremes.  SDS is a leveraged inverse ETF for the S&P 500 index. As you can see below, SDS (red line) is inverse to XIV (blue line). When the market goes up, XIV goes up (due to declining VIX) but SDS goes down. If I'm correct that in the next 1-2 weeks the stock market will "crash" again to test its recent low, SDS will shoot up quickly. Of course this is purely speculative and let's see how it plays out.