In The Middle Of The Sell Zone

I've been referring to the 1380-1400 zone here for weeks.  Little did I know the market would get there in two days.  It's just another example that anything can happen at anytime, and that the market can fake out anyone, even those who claim to anticipate it.  It's also another example of why I use options.  

When I know what my total risk is when I'm wrong, it's much easier to act in the face of danger.  By remaining calm after I got run over with SPY 136 puts (after being well ahead in them too), I was able to seize the next high odds opportunity with a clear head and erase half my loss.

Draghi's second round of comments hit the markets at about 1:30pm EST which would've been 6:30pm his time . . . on a Friday night.  The fact that he was actively jawboning our markets when he should have been having cocktails says to me that he's bluffing.  Indeed, that's why I chose to use puts several times Thursday and Friday even though I had been anticipating 1380-1400.  I really thought the market would see his bluff too.  Instead the market saw how short it was and covered.

Regardless, I'm still viewing 1380-1400 as a sell zone.  It will likely take some patience.  The futures have gotten under an equivalent spot on the cash that I was looking for on Friday -- 1382.88, but I want to see this confirmed by the cash index in the regular session.  Even then, I still think there could be one more down-up sequence before the top is in.  For example, there are two trend lines targeting the 1395 area.  This means I will use dips and rips to play both sides.