GOOG As an Example

I already started a GOOG short equity (Core-longer term ) position, I left plenty of room to add to it at better prices and we are in the area. I'd consider a short term call position to ride a move higher that I think and thought yesterday, will be used to lock in the "Buy the Dip" crowd, they'll feel justified in buying the dip and at the same time, any shorts that jumped in yesterday will likely get knocked off.

For now though I  can't buy a GOOG short term (day or so-) call for this psychological warfare, on the other hand, I could enter or add to the equity short, but I think chances are good we can get a better entry, although no where near as important as it is with options.

So I'll wait on both, I'll show you why and what I will wait for. I will keep looking for some Hit and run trades that look favorable.

 The most important is the 60 min chart, above the red trendline is a head fake move and part of the top, note how negative 3C is, smart money has known for a long time, that is why we have these long signals of them selling and probably creating enormous short positions (by virtue of the size of the negative divergence) that is on par with a bubble this big, fed by F_E_D liquidity that is obviously going to be shrinking as they try to also keep the market from forming any more of an asset bubble.

This longer term view and the unprecedented size, because of the unprecedented US and Global Central bank and economic policies is not a good options trade, but an equity short can withstand the extreme market without seeing too bad of a drawdown. This is why this area in the big picture is fine for an equity short,, but we can get better positioning.

 The 15 min is telling us the strategic view is moving to the tactical execution, this is where we really want to get serious about building out those positions.

 5 min chart is not at a good risk/momentum area for a call trade for short term profits, but...

The 1 min chart suggests GOOG may pullback intraday or so, that will give us a better entry for a call position to ride the bounce, when that is closed, we'll be close to adding put positions as well as filling out the equity short or for new positions, entering equity shorts.

Patience, although I'll keep looking.

Let me reassure you, if the data changes, I'd gladly change my position, but the data has been overwhelming in the message of the market.

They say, "Price pays", but in a market like this, "Price also takes away". I wouldn't want any longer term longs as a waterfall sell-off will put them at 1-2 month lows on a gap opening. The risk reward profile for being long here anything but short term trades, is very dangerous.

Why do you think they want to lock in the "Buy the Dip " crowd? They want to convince them that after a day like yesterday, buying the dip like they have done the last 4 years is still the right thing to do, this will lock these longs in and keep them buying as the market goes down until they are carried out feet first.