Update - 25th October

Dow can still surprise a lot of bears and one should not blindly short here; so far the longs did well to enjoy the ride to 11875; weakness will only be fully confirmed with a close below 11425 on DJIA and 1190 on SnP - until then, stay hedged or better - hold on to the cash as the fall after a close below 11425 will be far more juicy and rewarding. The turkey is still being cooked so don't write off the pending upside so easily; a poke to 12k mark is still not ruled out....

Cheerz

Update - 24th October

So far no signs of a sad Monday but it ain't over till the fat lady sings; target achieved - those who went long should now keep a trailing stop loss at 11875 and ride the contracts till the run lasts; a poke at 12k cannot be ruled out as of now.

Shorts should be fully hedged as of now and only when 11500 is broken decively on the downside, one should give up the hedges. [or 1190 level decisively broken on the S&P] - let us not forget that this is a bear market rally; the next leg down will be far more furious than the previous leg down.

There were a lot of pot shots taken at the team when this target was given with Dow sinking near 10400 levels; waves and charts don't lie - sometimes the interpretation does go awry only to return to sanity a couple of sessions later; hope you enjoyed the profits with Long Dow Futures.....

Update - 21st October

The upside has come through so far and shorts should not be opened before 11875 is taken out. There is very much a possibility that Dow may go on steroids for a couple of days so even when shorts are opened as close to 11875 as possible, hedge via futures in opposite direction or take some calls as specified in the earlier update this week. First round of shorts in the 11875-11975 zone and the next set should be opened only after a close below 11425 and then 11325 [The fall should start manifesting within 2 to 3 weeks maximum as Nasdaq is already showing negative divergence and same is the case with Transport as well]

The next leg of fall will be far more rapid and hence bears would do well to be patient and wait for the opportune moment.

No Fly Zone As of Now

Sluggish action after a brief round of short-covering and mixed zignals from markets. Unless Dow closes below 11425 and 11325 in a furious decline, there is still very much the possibility of inching higher. [likewise, unless SnP posts a close below 1190 levels, cannot write off a leg up and Happy Friday may still play out] Don't short without a hedge......
 

Bears Beware - lots of short covering pending

As usual, the sad Monday jinx played on and the Euro-zone crisis is a mere excuse - there is nothing convincing in today's fall and looks a slightly larger than expected correction - Puts played out well and now a bounce towards 11500 seems on the cards and can even carry higher. Full blown weakness to be confirmed only with a close below 11325 that gives T1 at 11150 levels. Stay hedged and enjoy the power of puts

Prime shorting candidates are Goldman Sachs and Google with a 3 month forward contract via futures or some delta neutral short straddles. Traders with some risk appetite can go long via current month futures and hedge the same with shorts via December series futures 

Interim Update - October 16th

Looking for a bounce towards the 11875-12 region which presents a shorting opportunity via December futures

Hedged straddle with 11500 Put and 11250 Put of Jan '12 and Mar'12 series respectively and Calls of 12k for the same series will play well on both sides of the range.

10250-10400 region to be retested within 8 weeks time and Thanks-Giving turkeys will fill grizzly bears with good food until Santa props up stuff again.......

Follow Up

No change For the Forecast at this point of time

Support lies at 10250-10500 levels and the potential to stage a counter-trend rally is high towards 11875 levels subject to 2 consecutive closes above 10450