Subscribers reported buying four July 24 180-strike puts at the close with DIA trading just beneath the 181.31 rally target I’d flagged the night before.  The target was in fact hit, and then exceeded by three cents, earlier in the day. But because this occurred minutes before the opening bell, I suggested holding off on the put purchase. By day’s end, however, after DIA had spent six hours creeping back up to the target, we staked out a small position with the puts trading near their intraday lows. This gambit was informed by a more important-looking target at 2119.25 that I’d flagged in the E-Mini S&Ps. The target was not a Hidden Pivot, but rather a trendline that looked likely to show some stopping power. And so it did, capping the day’s soporific uptrend at 2118.75, just two ticks beneath my target.

My gut feeling is that we will see a top of at least short-term importance at or near these levels. However, I wouldn’t advise gutting it out if the broad averages rise above their respective targets on Friday.  Traders should use a stop-loss of 0.50 for the puts — or perhaps 0.40 if it looks like they can be carried over the weekend for 0.40 or more. My guideline on position size was to risk as much as you might on a 20-to-1 horse whose name reminded you of a favorite uncle. The puts are pure speculation, and even though I regard a short at these heights as a decent bet, there’s no point putting ourselves in the path of the bullish stampede that is always possible.  That said, with the best possible news on Greece already out, odds of a weak opening Sunday night seem attractive. ______ UPDATE (12:39 p.m.): So far so good!  DIA has fallen as low as 180.01, pushing our puts as high as 0.97, and the E-Mini S&Ps have been down as low as 2112.75 after topping to-the-exact-tick at my 2119.25 target. Do nothing further for now.