Short on the S&P 500

The S&P 500 index failed to break through the 985-level again today. Why is this relevant to my ultra-short S&P position (SDS)?

Trader Mike answers in this post:

I've still got my eyes on the resistance around the highs of October 17th, 20th and 21st (depending on which index you're looking at). Until the bulls can produce a high above those highs I have to consider this rally nothing but a retracement in a larger downtrend.

I annotated my own chart adding today's continued confirmation of the S&P 500's downward trend:



In addition to the stochastics showing the S&P overbought, the RSI(2) also indicates the S&P is overbought.