My plan:
Shanghai index plunged 8.5% overnight. It was the worst one day drop since 2007. There was no apparent reason to point to the drop. My sense is it was more of fear than econ data. European majors are down more than 1% this AM. US stock indices fall below Friday's low. With FOMC nearing, I suspect we will see another test below and turn around later today or tomorrow. My targets are:
ES: Upside: 2070-72, 2077-79; Downside: 2058, 2053 area;
RUT: Upside: 1226, 1234-35; Downside: 1212 and 1205;
I will hold off any major selling on the short side for near term. Look for for OTM and long DTE for positioning.
Corn and wheat gaped down overnight. USD Fall didn't help overnight. I will stay out of further selling for now.
My execution:
Indices continued to melt down today. ES broke my 2058 target but 2 points shorted of 2055. My expected turn around didn't happen today. I would think there would some re-positioning happens tomorrow or Wednesday morning. If it doesn't happen then a real correction would be under way. That would be a real bearish Fed rate anticipation. I added couple more bull puts to fill in some weak spots. I made another stupid forgotten (-) sign mistake again. Luckily it was a credit. I also started to sell naked SPY puts as it requires much less margin (about $300 currently). I may use SPY for my naked put position instead of SPX for scaling profit. The draw backs are higher commissions and tax rate. I will make more profits to off set the draw backs.
Corn and wheat reached their Fib 78% RT level. There are no signs of buyers yet. I will continue to observe it.
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