This is a reiteration, but the setup is somewhat simple, I think. It is possible that the rally has topped. But it is also possible that “Green C” goes much higher.
And we’re getting close to the spot that may tell us which one is going to happen. I slightly favor the bulls, if I had to guess.
But, if it’s a 1-2 (in blue) of Green C, then we should find support in the orange box area and begin to rally. If we continue to fall, and breach the red trend line beneath us, more likely a bigger top is in.
But, with things like the local count on Tesla (here) which looks like it may have entered a 5th and final wave of something, we may find support and the market may still need to rally.
I have closed my bear call spreads, and I will be looking to sell higher strike puts against my long puts as we get into the orange box area. If we begin to fall precipitously, I can always buy the short puts back quickly—but I may not have another opportunity to sell against them at good prices. I have good prices on the long puts because I have sold against them twice before, and I have repeatedly taken some of them off at lows, and added those back on at various highs throughout this period, but if we shoot up, it will be hard for to manage them, so I think I will do something with them today while we’re down here. I can always change my mind about that later if we go lower, but I won’t be able to if we go shooting up higher.