Today's open confirms resumption of the primary downtrend and relegates last week's two rallies as transitory retracements. This will be the price pattern all of the way down to the ultimate bottom, wherever and whenever that will be. Shorter-term traders can make use of Fibonacci levels for fine tuning profit taking and re-entries. I'll provide the charts, number crunching and option selection to maximize leverage while trying to temper risk. Bottom line, cliche as it may be, is that the opportunities into the foreseeable future will be for lower prices and higher volatility. Volatility -UVXY Our December 17th UVXY volatility play was one expiration week away from a big payoff. We will enter again on a retracement, but not now. Indices: IWM & QQQ Puts Jan 21st near-money puts up between 50-80%, depending on strike price and index. The IWM Jan 21st $210P is up about 80% since entry (Canary In The Coal Mine). As that there are still 33 days left to expiration these puts still have huge appreciation potential. As we have done with TSLA in the past, we will be rolling up into out-of-the money strike prices as positions get deeper in-the-money. In a market like this, leverage is our friend. The two key illustrations below are (1) the 38.2% price level of the first keg down that stopped the counter-trend rally dead in its tracks on Dec 8th, and, (2) The initial Fib target zone that falls off deeply beneath 200. Breaking below 194 will bring 143 into view. IWM - Hourly
