Heavy put buying from 9:30-10:00AM was, I think, a function of heavy European hedging and selling into our market.
We want to do a fade trade here and go long and then reverse and go short if the trade doesn't materialize.
What we are seeing here is a global hedging hot potato decline. Russia gets hammered, for example, and sells stocks in Europe. Europe buys, then tries to unload in the US by selling here when we open. If we don't find a home for this new selling, then it will be "OPEN THE BOMBAY DOORS" and let it fly (drop).
So, at this point, we want to be long. Let's pick 1PM for entry. Use a stop of 0.50 DIA pts instead of 1 pt.
If stopped out with a 0.50 pt loss, then go short and risk 0.75 pts so our total risk is 1.25 pts.
If that starts to work, then just cover at the close AFTER dropping your stop down to breakeven after it is up by 1.00 DIA pt. Sound complicated? Not really. Read it again and again if you have to.
12:52PM EST NOW
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Hello-
Just one update -
I am now quoting the SPY and not the DIA. I had to change it on my software (QCharts) when the powers that be moved the primary quoting to the NYSE from the AMEX for the DIA etf. So, I'll alert you again. The next signal will be SPY and not DIA.
12:03PM Wednesday
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