GM gapped down on a disappointing earnings report this morning. It's is on a Sell Signal from July 6th, and with this gap down the bearish pattern has now repeated. The puts are down over 50% which is unfortunate if you are using a 50% stop, but advantageous if you believe in dollar cost averaging into a solid pattern recognition trade. If stopped, consider this a new trade, if still in, consider this an add-on opportunity. Repeat Sell Signal: GM Option: Sep16th $30P (0.80-0.82) Target: Lower trend channel line by Sep expiration QQQ Once a panic wave of selling hits the market it's almost too late to start buying index puts, so we are trying to front run a stock market meltdown by looking for "tells" arising out of short-term patterns. Breaking below 296 and staying below 296 is one of those patterns. The significance for EW analysis is that it will eliminate any credible bullish interpretation of recent price movement. Bottom line: So long as QQQ remains below 296 I am uber-bearish,
