It's time to review Key Levels across two major ETF stock indices (SPY & IWM) as the market remains overbought and the Fear and Greed Index stock in EXTREME GREED mode, at least for a few more hours. A drop below 75 would open the potential for a steep drop to under 25, EXTREME FEAR. We will use the following Key Levels to being to accumulate index puts, starting with Feb 16th option expiration, in anticpation of a deep enough decline to generate triple digit returns over the next 4-6 weeks. SPY Both the SPY Trend Model and Key Level breakdown are close to triggering Sell Signals and it could occur as early as late in today's session. A close below 464 would be weak enough to being accumulation of a short position, starting with the Feb 16th $460P. SPY 410.00 is Major Support and it must hold. A break below 400 is all in on the short-side for a quick drop to the Oct 2022 lows @ 350. IWM IWM - Alternative to SPY is IWM, taking an initial position in Feb 16th $190P on an IWM close below 195 and adding to on a close below 190 and/or below 185. Another Heads-Up - The Bullish Percent Index Leading off today was the Fear & Greed Index about to turn bearish with a break below 75. Closing this update is the Bullish Percent Index which is reason in and of itself to be buying index puts. There is no sure thing in market timing, if there was, we would all be rich and betting $1M on the Michigan Wolverines. But sometimes the evidence builds and keeps on building and you just have to take your shot. Between the Fear & Greed Index, the Bullish Percent Index and the breaking of Key Levels, that shot looks imminent. It's time to pay attention again, so heads-up to all.
