Here's what's going on. As I said earlier, we are either getting downside to bring the averages in line with options expiration Max Pain or there's a bigger downside move coming (perhaps a couple of days).
What I need to watch for today are signs that it may be an options expiration move only, in which case the market should start to see positive divergences in to the move down that build and we would likely continue on with the move up.
If there aren't strong enough positive divergences, then it's likely that the most probable outcome according to the charts as of yesterday is that we have a few days of downside before the move up finishes.
The only way to tell is to look for new divergences and new divergences always start on the fastest chart, the 1 min and if they are strong enough, they migrate to longer timeframes.
In today;'s case, if there were no new positive divergences, it would be highly likely that we continue down for a couple of days, but if new positive divergences form and especially if they migrate to longer charts, then it is more likely that today's move down was options expiration oriented only and we can expect the move up to commence shortly, likely early next week (Monday).
The reason for closing IWM/QQQ Puts is 1 the leverage and 2 the positive divergences formed quickly and strong on the IWM/QQQ charts. It remains to be seen where we go from here, but I'd rather you take a profit than a loss.
Charts...
The 2 min IWM chart has not seen the same yet, if it does, then we are likely to continue on the move up with only a 1-day interruption to the move up (today).
We'll watch and see what comes out of this.
I didn't close FAZ or UVXY because they did not have adverse divergences
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