Not Matt, but he might miss your post. He can correct me if I'm wrong. But I think the system usually looks for a bounce to exit/recuperate losses. If no bounce, I think it'll end up holding the long.

Remember my post to you where I mentioned the bulls were cocky two weeks ago and making fun of the shorts for shorting. That works the other way around too. The market can humble you quick.

Yeah, one of the reasons why I try not to post much anymore.

Just as an example of the VIX spike, check out the ES 1125 AUG 19 Puts. Way out of the money and they're currently giving you 6.75 points on it. 11 1/2 trading days till expiration, and that 1125 level on the ES is strong support. Those puts should expire worthless, unless the market totally crashes even more in the next couple weeks. I think it's safe to get a higher strike price on the puts to short better premium, but the 1125's seem like a great risk/reward for 7 points.

Tom,

Getting that big spike in the VIX today driving up premiums. Wrote some deeper otm puts as a result.

Aren't you more short than long? Shouldn't hurt you then if the market probes those levels.

I think writing some small otm puts is not a bad play today. If there's a spike in the VIX, then write some more.

In technical analysis, when you get a hammer, the next candle needs be a bullish candle to confirm it.

The way I interpret that is that we're very oversold at the moment, so it's hard for the bears to get more push to the downside. Hence, the short term action of the market will be quite choppy and whipsaw action.

I think the selloff has more to do with taking out a bunch of stops below that support level. We got a quick flush down this morning when the support and stops were taken out.

Seems like too much complacency for now. Yes, a spike in the VIX to flush out the longs could make a tradeable bottom.  Otherwise, just trail your short profits for now.

Lost key support there. Bulls need that to recover fast (like today), and hope for a false break.

In my best Steve impersonation voice: "Respect the message of the market."

Yes, nothing wrong with having long and short exposure. Imo, traders get themselves in trouble when they are heavily 100% long or 100% short. Knowing how to manage risk with writing options goes a long way with avoiding drawdowns in ones' account.

Robert,

If you play options, look into writing options. Sometimes, there's great opportunities for great risk/reward trades in these. For example, the great risk/reward trade for this week was to short calls and puts. The options market was pricing in a huge move this week in the markets(too huge imo). On Friday, one could have shorted the ES 1190 AUG 5 Puts at 3.00. The market would have to drop 100 points this week for these to be itm. It would take a flash crash or a gigantic move down for that to happen. The deeper otm calls were priced very high too. They were begging to be written, or at the least, written as hedges against longs.

There's positive divergences showing up on the MACD on the 15 min charts. Of course, positive divergences could be negated with an impulse move down, but the odds look more favorable now for a bounce than it did yesterday(before the +divergences).

Why let one dick rub you the wrong way?

And for other reasons, I'm not planning to post much on the blog either... except for some bad jokes here and there.

Fine with me too. Good to wait for a better setup.

Most charts and market stuff is usually left in the market analysis section. In the OT blog, most people post about politics, news, pictures of smallmouth bass, and Matt's cute baby.