An Evil Scheme
Forgive me if I’m not going to be posting a laundry list of setups today as I’m elbow deep in reorganizing/redesigning the entire site. Yes, it’s a mess and for more details please read last night’s post which explains what’s going on and what to expect in the new year. But in a nutshell – if you think Evil Speculator was cool now then think again. I’m going to work hard and kick things into fifth gear during our Christmas holidays, so be prepared to hit the ground running in early 2016.
As the saying goes – no rest for the wicked! There is always time for another evil market scheme and I’ve concocted a veritable doozy for you guys today. If you take a peek at the chart above then you’ll see that I’m already short here with a stop near 2013.75 where I would expect ST resistance.
Here’s the Zero snapshot of last Friday’s tape. We did see early signs of a possible divergence play but it would have to resolve in the next few hours today. So given that here’s what I’m thinking:
- If the Zero agrees I would grab a long position above 2013.75 – meaning the divergence is continuing and the Zero Lite signal is in positive territory.
- Similarly I would flip for a long position if the Zero tells me that buying pressure seems favorable near the psychologically charged 2k mark.
Now if we head down (and I remain in my shorts) I will once again pay attention around the 1980 mark as I expect buyers to muster up a defensive line there. Once again it’ll be important that you closely watch the Zero for signs of participation as we may drop lower quickly on fumes just to shake out some weak hands.
Below 1980 it’s anyone’s guess as we could be looking at an Evil Santa scenario. With some luck I would still be short there but if I’m not then would probably wait until after 3:00pm Eastern to gauge what’s going on. Before that it’s possible we push down quickly but then reverse into the close. This is one of those situations where we’ll have to be nimble and keep a close eye on participation.
Keep It Nimble
Suffice it to say that this is not the spot to make big bets as you will be handed your ass in a decorative Christmas hand basket. Could we slip off the plate here like a 72oz Texan steak? Absolutely, but if you want to play this scenario then drop into some cheap ATM January puts instead. Consider it a lottery ticket – or perhaps a bit of insurance against a market dislocation. We’ll actually revisit this topic later this week or early next year at the very latest.
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