What a difference 5 mins can make!

If you thought the market started off the day bad, it ended much worse. Its hard to believe but the day after a follow through day (IBD marked it yesterday), the SPX fell 1.5% today, most of that in the first 2 hours, but then brutally in the last 5 minutes.

The TRIN went crazy today showing selling was wide spread and on heavy volume. It closed at 3.17 a level not seen since September 1st, but was even higher intraday.

Again, the SPX sits around this 2040 level, an important level because it acted as support last Wednesday and acted as the gap area last Friday and again Tuesday.

After the 1% loss in the morning, the SPX bounced off its lower Bollinger Band on the 15-min chart and rallied a bit (see arrow in the charts above). At that point I bought some TNA and TQQQ. The rally only extended to the mid-line on the 15 min chart and then slid down with the declining line. Then everything broke loose about 5 mins before the market closed. 

So, instead of picking the bottom, we have an issue of trying to repair a trade that when wrong. This can be handled with options on those ETFs. We need to sell some OTM calls, and, if the market is weak, use them proceeds to collarize the ETFs with some put buys. Hopefully, we can limit the downside further and wait for some rebound. 

With the TRIN so high, I cannot see much more than 1 day selling. but that maybe a pretty dismal day! 

The SKEW came down today, but still remains above 130. Tomorrow is option expiration. For the major players the options expired today, and tomorrow is just clean up with settlement prices. It can be a bit of a mess in the morning!