Believe it or not, I'm still waiting

Still on the sidelines and still waiting.  As I indicated in my earlier post and in the sidebar, I expect the market to complete a correction in late September.  My short-term options model isn't alerting me to any imminent trades in either direction.  The only "promising" signal on the horizon could be a peak near mid-September. So the plan is to see if the market can rally up to a peak around this time period for a short trade, which could be the last opportunity before the market resumes its apparent long term up trend.

Short trade design

I'm a little disappointed that the market hasn't yet rallied to what I believe is the ideal shorting "zone" of 1720/1725.  If the top is already in, then a potential "next best" shorting level would be 1685/1710.  Using 1710 as the top, my revised Fibonacci analysis puts resistance at 1618/1624 -- this would be the first profit objective on a short trade and yield an acceptable 2.4 reward to risk ratio.  My short-term options model is still showing that a reversal or top could occur sometime between Aug 21 and Sept 5.  I'm just hoping that this trade develops so I can put it in play -- hoping that the bear train hasn't left the station without me.  All other criteria have been satisfied, including results of my futures analysis and poor (negative divergence) on the weekly RSI for the S&P 500.

Patiently waiting for the top

The minor pullback we've experienced over the last week will likely prolong the topping process.  The equity and index options market is showing no signs of "worry", but rather euphoria.  Simulations of my options-based model indicate that the window for a top is more likely to be between 8/26 and 9/5.  This could change rapidly if the character of "bets" placed in the options market becomes more pessimistic.  I'm still looking for the market to push through prior resistance near 1709 to lure investors into the market before a top in the 1720/1725 region.

Short trade on the horizon

I'm patiently waiting for my options model to signal the next top sometime in the next three weeks with August 21 being the best estimate.  According to my Fibonacci analysis, I anticipate a top between 1720/1725.  If the S&P achieves this level, price targets for a short trade would be 1658, then 1630, and 1606.  Using 1658, the reward/risk ratio would be 2.06.  More details to come.