Weâ€™re going for the 885 bear call spread on the RUT. The RUT is accelerating to the upside, giving us a bit more room to the upside should the SPX top somewhere in the next 20 points or so, which is (still) what we expect. It could eek out gains in the short term, and as in all tops, we have no idea when/where it will happen, just the probabilities. Weâ€™ll update you later on fills.
Our thought process for the market is that weâ€™re slowly either a) tracing out an ending diagonal pattern, or b) completing an impulse pattern inside a long wave 4 and waiting for a final 5th. Under either of those scenarios, the market should not exceed 1385 on the SPX. If it does, weâ€™ll revise accordingly, but for now the market is exhibiting signs of exhaustion and a general lack of sellers and buyers, a traditional sign of a market top. As Chris stated on this past weekendâ€™s interview he did with Tim Wood, market tops are a process. They extract maximum pain on the shorts who ceaselessly attempt to short on every new high. Eventually this will end- probably with an overnight move that will take many by surprise. Otherwise, the market will grind higher slowly but surely, but without the energy it saw in the Fall.