The various market indices are all in the process of correcting the initial leg down of what looks like an important change-in-trend. This is an intermediate term chart of the IWM, which shows the steepness of the recent decline off of its Nov 8th ATH, as well as an Intermediate Term Sell Signal on Nov 23rd. As shown Monday with the DJIA, price is having trouble reaching the minimum Fibonacci retracement level of 0.382. There is at least a 50-50 chance that the entire counter-trend rally is over, opening the door for a new, stronger leg down (which leaves a 50-50 chance of marginal further upside). In addition or in lieu of UVXY calls, IWM puts offer a highly leveraged participation in the anticipated decline. Since Nov 8th IWM has dropped 30 points to its lows. A similar drop from current levels (220) would put IWM at or below 190 over the next month and/or into the new year. Attractive IWM Intermediate Term Puts IWM Jan 21st $210P = 5.80-6.00: Target = $20+ IWM Jan 21st $200P = 3.75-3.80: Target = $10+ Stops: 50%
