I hadn’t noticed the 318.30 target shown in the inset, but it jumped out at me when I accidentally imposed a 240-minute chart on DIA. It looks like a great place to try shorting, notwithstanding the higher targets where we are looking for possible tops in IWM, ES and QQQ. Specifically, I’ll suggest buying puts that expire in around two weeks for less than 0.50 when DIA gets within 0.15 of the target. On Friday, with DIA trading around 311, the nearest strike that would meet our criteria was 285. This implies we’ll likely be looking at 290s or 295 when the time comes. You can also interpolate by buying SDOW shares, which closed Friday at 11.90. A midpoint Hidden Pivot support that comes in at exactly 9.45 corresponds closely to the 318.30 DIA target. _______ UPDATE (Feb 10, 8:04 p.m.): Stay tuned to the chat room, since I’d hate for the Dow to turn down with a vengeance after having gotten within 1% of my target. My recommendation is to buy at least a few puts ahead of the weekend, preferably with this gas-bag in a rally that I am confident will be distributive.
DIA – Dow Industrials ETF (Last:314.01)