INDEX UPDATE
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Its about time to initiate PUTS. Intraday, we got above 8600 but did not stay there that long at all, which is confirming that the STAIR-STEP at 8600 range is a strong resistance, not that it cant be broken.
My short-term technicals are in the 65-70 range which is slightly below the overbought line at 80. From purely a mathematical calculation, without considering support lines, trendlines, moving averages or any other common techical indicator, the DOW will get into the CLASS SELL range if it moves up 150-225 points from todays close.
With that calculation, I am quite comfortable to say that the the highest this immediate short-term upswing could get is 8750. 8850 is still possible, but is now much less probable.
Please keep in mind that the market can reverse without becoming a CLASS SELL, and I believe that the top of this upswing could only get as high as 8600. Therefore, I am concluding that initiating of PUTS near 8600 will do fine.
My strategy is to initiate 1/2 position tomorrow near the intraday high, assuming that the DOW will at least be in positive territory sometime tomorrow or the full position if 8750 is achieved. In the case of only opening 1/2 position, If the DOW continues up I will just add on with the other half of the position. Increased weakness should begin WED, latest Thurs, and could be as early as tomorrow afternoon.
If the forthcoming downswing does start at the 8600 range near THUR, then it is very probable that the 8300 support will be broken to the downside, which of course is BAD. A break of 8300 will also technically imply that 8000 may not hold in the future, but not neccessarily immediately during that downswing.
Hope I was clear - Its basicly PUT TIME.
Seeya |
