Monday, April 13, 2009

Odds are very very high that we drop like a rock

Well, late in the day we did get a push (although ever so lightly) through the top of the trend line, and it was quickly reversed. Apparently Goldman's 'beating' their earnings number isn't drawing in any more buyers as GS is down in AH. If this is done (if my labeling of the 5/60 min charts is correct) then tomorrow should see massive selling and a piercing of the bottom trendline no later than Wed. Our first 'a' wave should take us to at least the 780-800 range.

I did get my triggers for my IWM puts that were set at ES 850 & 860. So now I'm sitting on IWM 38 May puts w/ an avg. price of .59. I'll sell 1/4th has soon as we hit 1.25, and then I'll likely sell some Apr or May puts against my position for a little more insurance.

Best of luck!


  1. Rich, thanks for the solid work you provide us nearly every day. I jumped the gun a little bit on going short here by a few days and it looks like today might be the day that this minor wave up breaks.
    Also, I like that you post some trades. Very instructive. What price puts will you sell if this plays out to the downside?

  2. Would the 50 day MA be a good support level, if this is indeed B of Primary B?

  3. saleen - probably initial support. I'm not sure the bulls will get off so easily otherwise this primary wave B will hit its target before long. My guess is that wave 'a' of 'B' ends around that level. Then we get a 'b' up, and finally a 'c' down somewhere in the 720-750 range.

  4. press man - if we can get something going to the downside, i would probably sell apr 40 first, and then 36 or 37 May. Although I will likely take most off the table once we hit the 40s as we may have a 2 wk bounce in that area and that is definitely not good for May puts.