Some of my readers will recognize my previous work from the Reversion to the Unified Mean (RUM) Wave blog. I wrote it in relative anonymity for a couple years. That work can now be found here.
Pricing in a resolution
The market looks to be pricing in a resolution to the fiscal cliff. Despite what I considered to be negative commentary from the news outlets, traders seem to just be happy that negotiations are underway. Time will tell whether or not the result of a resolution will be good enough to keep the market satisfied.
My bearish option play is down a lot. But, risk is risky and I'm only playing with an amount I'm willing to lose. I plan to keep holding it. I may not get it all back, but I think there will be a better opportunity to get it back. Even if I don't, I entered the trade knowing I was willing to let it go to zero. Just the way I'm playing the game, for this relatively small position.
Scores pushed higher today. I don't see any strong signs on the charts of the market reversing course tomorrow, but we'll see. News is the driver of this market.
GOOD LUCK TOMORROW!