Before The Finale
1:34pm EDT: We’re about 45 minutes away from the ‘big finale’ in this month’s kabuki dance. I decided to cut my December puts at the bottom of the drop to 906. Here’s why:
What I’m seeing right now looks like either we completed some weird a-b-c – or we are in the process of painting a motive wave. I have some doubts as to this being a flat as the c wave would be hugely unproportional. So, keeping with simple/stupid I couldn’t help but think that this ‘may be’ a first leg up. Which would be followed be a little dip and then a rally busting above the 956 highs.
Of course we could just roll over after 2:15pm and I’m SOL. What actually was the straw for cutting those puts was the 6/25 turn date. We either drop like a rock after the announcement and paint a significant low – or we bust higher and paint a new high. In either case I have a better chance at getting positioned at either extreme – whichever is going to play out. I looked at a few Dollars worth of profits remaining in those Decembers and decided to cash my chips. Call me overly cautious – but that’s how I made it through this year with green in my account YTD – not many traders can say that (unless they work at Goldman Sucks).
It might actually be worthwile putting a few bucks into some OTM lottery tickets but I’m sure the volatility has already been jacked up on those.
As per the wave count – I’m a bit split right now: Only a pretty explosive move will bring us to a new low or a new high. The odds right now are 50/50 for each of those scenarios – and I decided that I didn’t like those odds. Hope this makes sense.
Remember – there are old traders and bold traders – but there are no old bold traders 😉
2:30pm EDT: Well, looks like I did a great job selling my puts around the top – LOL. Well, I actually dropped them around SPX 906 – at least not at the very top 😉
Meh – I can live with my decision – never been much of a gambler and the news about Bernanke conviently pushed right before the announcement was not coincidential.