A Broader Example

I'm going to use FAZ as a proxy for the market 1) because it gives good signals, 2) because it's related to financials and the market is going where financials are going.

 This is FAZ (Financial BEAR 3x) on a daily chart, ultimately this is where I want to be. The leading positive divergence on a daily chart is a VERY strong signal, so effectively, for the long haul I want to be short financials and the market.

However in the shorter term, this is FAZ on a 60 min chart, it's negative and shown distribution on several occasions. This indicates to me along with a lot of other charts, that the market wants to bounce as the bear trade is getting overcrowded.

 The 15 min chart confirms the same.

 As does the 10 min chart

 And even the 1 min chart today on the sell-off. It seems FAZ is being distributed near highs.

Looking at the last time the market reacted to the end of QE1, there were some steep plunges, but also some nice counter trend rallies.

I think this time is different then the end of QE 1, there's a lot more bad news to be considered.

However, the market doesn't fall straight down and the last 5 or 6 day, the market has definitely lost the downside momentum it had going for it. I think it's possible that the calls and puts for that matter are going to be pinned in a narrow range. Who writes the majority of options? Most retail traders buy them, not write them, so who profits from pinning them and seeing them expire worthless?

If I'm close to on track here, then tomorrow options and puts which are close together and can easily be pinned together near the highest volume and open interest, are pinned. Perhaps the start of the week, we see a counter trend move in the market.

To be clear, my bias is VERY bearish, but a bounce can and should be traded and will ultimately set up some great positions on the short side.