Price Enters The Zone

Price looks like it's gunning for the zone that I've been waiting for under the megaphone scenario. 1308-1310 on the cash S&P. But the index will have to breach the 50 day MA first, which is at 1304.32, otherwise it may serve as overhead resistance.

The futures just hit 1302.75 at 8 am, but are tracing out a small 5-wave pattern to the downside. It remains to be seen whether this will develop into a larger sell off.

I scaled out of calls yesterday but left a small position. I think I'll capture the premium expansion at the open and take profits, then switch strategy. I'll go long SPY 130 puts and wait for OEX 585 puts to get priced right (I like 1.50). Then I will use the SSO for hedging on dips.

With higher targets, I want to use hedging strategies until I feel the market has definitely hit the wall.