Subscribers reported getting short a single tick off the high today, reaping what turned out to be a relatively quick and easy bonanza. The E-Minis sold off hard a half-hour after peaking, allowing those who used December futures to leverage the move to rack up gains of as much as $1,250 per contract. Most reported profits ranging between $400 and $750 — not bad for the 35 minutes of work it took to cash out at that level. Some traders reported using put options, including SPY Oct 11 295s bought for 0.73 that subsequently traded as high as 1.32. Puts offered a cheap way to play, but if you factored in slippage they would have been rather more labor-intensive to manage than futures contracts. So what’s next? I view any rally these days as a short-sale opportunity, and I will continue to look for them. The best place to keep apprised in real time is in the Trading Room. I am not quite ready to go all-in on a short, however, because I still expect AAPL, which closed at 227.40, to hit 243.68 before it runs out of steam. _______ UPDATE (Oct 8, 5:31 p.m.): The sharp selloff stopped precisely at the 2890.00 midpoint support of this pattern. Its decisive breach would portend more downside to the 2820.50 target. Traders should be alert for a reversal from our ‘sweet spot’ back up to the green line, since that could set up an opportune ‘mechanical’ short. _______ UPDATE (Oct 10, 10:45 p.m.) Sellers failed for a second straight day to take out the 2890.00 midpoint support. The reaction looks torqued to blow past the 2959.50 point ‘C’ of the bearish pattern, opening a path to 3000, where a series of tops were recorded in the last week of September.
ESZ19 – December E-Mini S&P (Last:2945.70)