Acknowledgement: The Marobozu yesterday is very impressive and in pure trading dynamics it opens to scenarios straight up to 2140 or even 2200. This is said.
Now, despite the violence of the move up, magnified by some short covering (best seen on SPY) the area 2090/2100 is very difficult to break before year end.
Despite the risk of follow through, it is at stage still more likely that this is a dead cat bounce and that the next target is 1900 on the SPX.
Monthly Pivot: 2048.
Unlike 2 weeks ago, there is a high level of energy available.. The question is which side it will be channeled.
When SPX moves 40/60 points per day, a lot can happen. My reading is these moves at the top are not healthy but i coudl be wrong
The way it is played is key:
- Avoid future to avoid being carried away. If so stop 2110.
- Buy 2000 Put expiry 9th of Jan - Value 10 (a third of the daily amplitude)
Note for reference that the 2100 call for the same expiry is worth 7.5... The market prices some decent probability to reach 2140 by then. Time will tell.