everyone runs around a group of chairs until the music stops... then they all sit down. But each time someone is without a chair! So at what level will the 'music' stop on the NAZ and SPY, etc. Even the healthiest bull or bear markets have retracements/ pullbacks lasting for more than a few minutes! Maybe this market will prove both Fibonacci and Elliot lived in vain. Has the world economy and the USA really improved that much in the past few months to justify this exuberance! One minute the US might not be able to pay our bills if Congress does not act, and European countries are going bankruptcy, then suddenly all stocks and indexes are being marked higher on a daily basis. 1. I think we find an interim 'top' late this week, and correct next week into expiry. I know this because I have Feb call back spreads and bull put spreads, on NDX; thus I know from past history, the market will have to find some way to screw me on these positions if I hold into Feb monthly expiry, or roll to higher put strikes. In fact if anyone whose short wants to pay me, I will sell some weekly 2500 weekly puts tomorrow, and this is guaranteed to create an automatic >50 points drop in NDX by this Friday. lol 2. Another scenario is we run up into Valentines Day/Feb expiry, then correct the following week. I am not sure if this scenario comports with the O/I in NDX February call and put strikes. But then I sometimes suck at analyzing open interest, even though I keep looking for the holy grail to analyzing same. 3. A third scenario is we continue to run for Q1, and correct in Q2. Just wondering when will the music stop, and who will get left without a chair.
Iceman, don't worry your head with all that complex "iron butterfly bull put spread call" options crap. Just buy and place a target somewhere higher. Just buy. Buy, buy, buy. If you wait for a dip to buy, you may never get in. If you're afraid you're buying at the top and might take a little heat on the trade, I'll help ease your fears: Look at ET member "candles", who bought ES in early May last year, looking for yet another reasonable 30 point profit: 05-02-11 10:34 AM back in long here at 1358 see if i can get another +30 point winner OK, so the market was rather "toppy" at that point, and the trade's taken a few little detours over the months, but hey, that target's back in sight now!
Yeh, but can your trading account handle the heat? What if that heat is more than a 50% drop from the high, and I've gone all in leveraging my entire account 400 to 1?