You can see that there is a large coiled spring situation forming here. When a coiled spring forms, it is either going to blow to the bottom or topside. And I happen to know from the weekly chart that its going to blow to the bottom side. Also the MACD indicator above is also a strong signal of weakness.
We have a straddle open out there at a 2:1 ratio. We are pretty much save with the 2x being on the downside for any big drop that will be coming up in the next month or so. So with this coiling up, the question is when can I exit the calls? The answer is any time I can. The next time there is a push up that doesn't violate the upper channel as I drew of the screen, I am going to get out of the calls. If it does violate the upperchannel that I drew with the coiled spring on the candlestick chart, then all bets are off and I will hold the call. I would calculate the chances of that to be less than 15%.
How to Play this: Get ready with your puts and your shorting. This is not the time to go long, buy stock, or anything betting that the market will go up.
Stay tuned and Stay Frosty,
Mark
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