ORIGINAL POST 7:45 AM PDT
Sorry for the delay in posting this. I’ve had my MacBook Pro hooked up to an external monitor, and every once in a while the video card does a swan dive. Going back to the trusty G4 for now.
Anyway, 1344 was my target and here we are. My instruments of choice for now are SPY and BAC puts and VIX calls — keeping it simple.
I’d have preferred to get here via bogus debt ceiling news, but will gladly settle for bogus housing data, Morgan Stanley earnings that don’t suck as much as expected, Philly factory activity and the 50th miraculous Euro stick-save of the year.
This leaves open the possibility that we’ll have one more bump when the debt ceiling news breaks, depending on whether we’re down significantly between now and then. My best guess at this point is we give up most or all of these gains in the next day or two unless Congress gets its act together — in which case it’ll be an interruption of the decline.
Just finished the FHFA housing report, and I can tell you flat out that this is not great news. As usual, the press is focusing on the puppy that was saved and not the burning apartment building. The Philly Fed survey report was similarly underwhelming. I’ll do a separate post about this later if I have time.
UPDATE: 9:00 AM PDT
DX just completed a perfect little bullish butterfly that started on the 13th. Initial target is the .618 of DA, which is 75.42. Subsequent targets are the 1.272 and 1.618 extensions at 76.6 and 77.2 respectively.
UPDATE: 10:30 AM PDT
SPX is giving it the old college try, but there are divergences everywhere. DX is doing the same, in the other direction. 1347 might be the last best chance at an excellent short. I expect it to start down in earnest around 10:45 AM Pacific time.
UPDATE: 10:37 AM PDT
Sorry, couldn’t resist this addition that just popped up on my screen:
Buying a few more BAC puts just for grins. It looks very overbought on every chart I’ve got.