Until the market gets below 1640.62, I want to position myself for it to keep testing higher. Any weakness today will be a chance to get long against 40.62. Looking at the volume profile from the last few weeks, it looks as though the market wants to get to the 1685 area to test it.
The market is simply a price discovery mechanism. It seems that price discovered buyers Friday when it tested 40.62. 1669.51 remains a valid target. Should that be exceeded, 1685 could be next. It will keep heading higher until it discovers sellers.
I've been a steady buyer of SPY puts as far out as December of 2014. So if I'm wrong, that's fine. A little pain against a hard stop at 40.62 is the price I would pay.
The vote on Syria looks as if it will fail, and that is probably what the market is sensing. Oil is also down today, which is another clue. A NO vote could see a sharp spike higher.
Marz,
ReplyDeleteHow are you positioning. I have some IWM put and Vix calls for sep. I am thinking about rolling it to Oct. I know you have got some spy puts for dec 2014 what strike is it.
Are you thinking we make a higher high infront of FOMC. I am debating between october and nov vix. I have some TNA call options which are doing ok, I might try to book it.
Bill
Added a bunch of SSO against the SPXU that I've been holding and have been scaling it out and will do so today as well. Got stopped on UPRO 3X in the 1628-1630 area which sucked. Still adding the OTM puts. Lately been using March 2014 130s. May add to the Dec 2014 100s too.
ReplyDeleteNot seeing a higher high yet, but a right shoulder of a head and shoulders pattern. But a higher high could make a nice looking bearish wedge (ending diagonal). Wished the VIX looked better (closer to lows) but may go for some soon. Good luck.