As I mentioned today I’m not going to post any market forecasts for the remainder of the week for the following reasons:

I’m completely worn out and so is Berk. Six months of trading a hyper volatile market that’s also being manipulated almost on a daily basis have been taking their emotional toll. I need a few days where I climb back into my inner shell and reconnect with my evil self. It seems that most of us have mentally adjusted to this crazy market and this has produced a constant uneasiness which I am capable of dealing with for reasonable periods of time. However, I also know when the moment for a mental refill has arrived – and that time has come.
The market has reached record levels of volatility at this point and most indicators I usually rely on are  being ignored by irrational exuberance on the parts of the perma-bulls. You can probably chalk some of that up to a low volume holiday market, which today was getting banged harder than a $20 bunk bunny.  It’s not that I am lost in my wave pattern or the general market outlook – we are most likely already in intermediate wave (4) to the upside. But after three days of extremely overbought conditions today’s tape shows me that I might have better chances taking a flight out to Vegas and trying my luck over at the Sands (and the girls are prettier).
Let’s face it – the option market completely sucks right now and thus Berk and I have decided to focus on a new futures trading system we are developing. Have been paper trading it so far with very favorable result, even in this stinking tape. The coming weeks are going to be pretty tough for option traders as the VIX is still sky high and call option premiums will be crushed by diminishing vega.
On top of this the market makers are completely impossible right now. I grabbed some deep ITM SPY puts today and watched the option spread remain unchanged despite the SPX dropping by 5 points. Tried the same with DIA puts a few minutes later with almost identical results – made a measly $5 despite a noticable move in my favor. I’m not a genius but know when I’m being gipped. Thus, it’s time to consider a renewed approach to trading this market – it’s either that or wait things out until the end of January when we are nearing the top of intermediate (4).
Based on the previous point I am now starting to believe that the usual EWT reports we are posting are useful, but don’t seem to be helping most members execute successful trades. Let me be clear on that: We will continue posting EWT reports, but I don’t see why mechanically posting reports is going to help anyone if the market is in a transitory or exceptional state. My motto has always been less is more, and this is all we need to know tonight:

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