black-monday

Look out for next week… we’re about to start a large wave 3 move down!  Destination… Unknown?  Monday is an “iffy” day, as we are now in a smaller wave 2 up inside of a larger wave 3 down.  So, it might not rollover until Tuesday, (but I created the image above just in case it does… as I thought it was cool looking).  I’ll have more on my weekend update, but for now we bears might have to endure a small amount of pain while the tape pushes up to 1080 or so Monday morning.

That’s about as high as I can possibly see it getting.  Honestly though… I don’t think it will even come close.  We very well could drop Monday afternoon and not stop until we hit 1020 or so.  I waited all day for a chance to get in short and the tape looked so weak that I didn’t think I’d have a chance to.  So, I got in around 1pm and the rally in the afternoon (unexpected… of course) put me a little in the negative on the position.

But, I’d already planned to hold it until OPX if necessary.  It’s a 106/101 SPY put spread.  That means I bought the 106 and sold the 101.  When we hit the 102 area (not “IF”, but “WHEN”), I’ll get out and wait for a bounce to occur.  About 102.50 is where the 200dma is on the daily charts.  That should give the market a couple of days of a bounce, before more selling happens.  We could hit that level Monday if people start to panic in the afternoon?  Who knows?  It should be there before the week ends though… so don’t panic!  Stay short!  We have lots more downside to come.

As for the bounce from the 102 area, I don’t know yet if I’ll play it back up or not, as it’s too dangerous to go long right now.  I might take a small position, or just wait for it to peak and go short again.  We’ll see when will cross that road.

Red

P.S. I know that it might seem like you have missed the big move and it’s going to rally back on you… well stop thinking like that and relax!  The Monthly, Weekly, and Daily chart’s are all rolling over.  Were going down to the low 900′s… before the March expiration most likely.  Hang tight, the drop hasn’t started yet!