We’ve been using a 323.59 target on the monthly chart as a precise place to look for a potentially important top. However, the thumbnail chart in the inset shows another not far from it at 327.27 that also looks very promising for getting short with risk tightly controlled. On balance, I’ll suggest staking out a small short position at the lower target, but adding to it aggressively if the rally should continue to the higher Hidden Pivot. Positioning can be accomplished using out-of-the-money put options that expire in perhaps three weeks, although you should allow an extra week for puts bought with DIA at 323.59. I will provide timely guidance when appropriate, but you should review the free instructional material concerning butterfly spreads on your Account page beforehand, since that is how we may proceed. _______ UPDATE (Mar 8, 6:56 p.m. ET): If you’re keen to short this barf-bag with a very tight stop-loss in an opportune place, targets corresponding to 323.59 lie at 32,692 for the DJIA and at 32,745 for the E-Mini-Dow. _______ UPDATE (Mar 10, 12:16 p.m.): We looked at DIA during this morning’s tutorial session, and found the 323.59 target too juicy NOT to short. We considered legging into some Mar 26 300/29? put spreads for cheap — 0.30 or less — buying four 300 puts first. Here’s the DIA chart again with the ridiculously juicy target at 323.59. _______ UPDATE (Mar 10, 3:46 p.m.): With DIA peaking at 324.31, the March 36 300 puts traded down to 0.83, but I’ll track them officially for 0.86. You should be risking as much as you could afford to lose on a 30-to-1 horse that had a good morning workout, and your expectations should be low, since this bet is being made just as the bull market is entering its 13th year. For now, good till canceled, offer an equal number of 297 puts short for 0.03 more than you paid for the 300s. With any luck, the stock market will suffer a massive coronary on tomorrow’s opening. Keep your fingers crossed!
DIA – Dow Industrials ETF (Last:323.61)