Today the market seemed to give up the ghost. The RumWave chart made a solid move into the "red light" criteria around 11:00 CST. At about 2:20 CST I sent an email out to my friends alerting them that the red light would be illuminated this evening, and that I planned to move into a bearish option position. I purchased a Put on the IWM at about 2:30 CST. My intended holding period is 10-20 trading days. However, if the facts change I'll cash out. From here until I decide otherwise, I'll update the "Ultra Wave" with a short position in SDOW, a 3x inverse of the DJIA. Full disclosure, I am not personally in this position. I'm only in my bearish option play.
Bearish plays are very high risk in this environment Any news about a fiscal cliff deal could trump otherwise valid signals. However, I trust my modeling and backtesting.
TSP: G fund
Questions or comments? Email me: firstname.lastname@example.org
GOOD LUCK TOMORROW!