The pattern shown is as gnarly-perfect as they come, and so we should expect the 318.30 target drum-rolled here earlier to work with astounding precision. That implies that the so-far high at 315.76 will need to be improved on before we can consider the rally spent. Even if I am off by a few pennies, I strongly doubt DIA will exceed 318.30 by much before taking the plunge that is so grotesquely overdue. My advice remains unchanged in any event: Buy puts that expire in around two weeks for less than 0.50 when DIA gets within 0.15 of the target. I will be keeping close track and may need to adjust this guidance if index futures spike Sunday evening, so stay tuned. ______ UPDATE (Feb 18, 9:13 a.m.): Tuesday’s pre-opening high at 317.60 missed the target by 70 cents, or less than a point. Although this is not quite ‘astounding precision’, it’s close enough for us to consider the target fulfilled. Now let’s see how far the reversal goes.
DIA – Dow Industrials ETF (Last:315.04)