Fib Magic

3:45pm EDT: Wanted you guys to see this before we close today:

Basically if you measure wave A up which ended at the open – wave C would measure exactly 161.8% (label is wrong on chart) of A at the 83.2% fib line. So, I expect this to become major resistance if we push higher. Maybe it even will be the high of the week – I’m still cautious about targets.

3:53pm EDT: BTW, we are above 8300 on the Dow (applause and standing ovation). Mole: Thank you thank you – I’ll be here all week…

3:58pm EDT: I just got a boat load of Aug. SPY puts – remember they trade until 4:15pm. The reason I got Aug is if we drop hard from here I will hold them – if we go down and hold I probably leg out.

4:02pm EDT: No wrap up post today – I’m worn out.

IMPORTANT UPDATE: Believe it or not I’ve got hit by another power outage which took down my entire neighborhood. So, I’m not sure if I’m able to do an update tonight as I’m starting to run out of juice on my little lappy.

Bottom line: We should be done with a flat (a-b-c) that ended today. If we keep rallying much beyond 8400 on the DJI I would close the SPY puts I bought at the end of today’s session. So, basically this is where the rubber meets the road for the bears – either we get a take down tomorrow, rapidly pushing us towards 7,700 on the DJI or the jig is up on my medium term bearish stance.

See you tomorrow rats – and let the trading Gods have mercy on our souls…. 😉