No change to the outlook except for the fact that the upisde went far beyond expected levels of 12600 on DJIA and well above 1300 on SnP 500. Whilst some bears are jumping to short this market, IMHO it is better to wait for a few more days for complete confirmation of the downtrend [that is eventually expected]
Shorts via March futures created now on DJIA must be hedged with March 12700 Call in the ratio 1:1 or 12800 Call with ratio 1:2 IMHO
For SnP 500, shorts via March futures must be hedged with the March 1310 Call in the ratio 1:1 or 1320 Call in the ratio 1:2. IMHO
If the downturn does occur as expected, then bears could be looking for targets anywhere between 11800 and 12200 in 3 to 5 weeks time, making losses on the calls worth ignoring; if bulls do spring in a surprise, the calls will insure the losses on the futures section.
Next Update: After a weekly close below 12200.......OR 13200 on Dow spot whichever is earlier!!!
Shorts via March futures created now on DJIA must be hedged with March 12700 Call in the ratio 1:1 or 12800 Call with ratio 1:2 IMHO
For SnP 500, shorts via March futures must be hedged with the March 1310 Call in the ratio 1:1 or 1320 Call in the ratio 1:2. IMHO
If the downturn does occur as expected, then bears could be looking for targets anywhere between 11800 and 12200 in 3 to 5 weeks time, making losses on the calls worth ignoring; if bulls do spring in a surprise, the calls will insure the losses on the futures section.
Next Update: After a weekly close below 12200.......OR 13200 on Dow spot whichever is earlier!!!
Thanks Nagraj
ReplyDeleteI enjoy reading your comments on the DJX
Thanks for the hard wrok as always
Cheers
Joy