Options and Stock Market Technical Chart Analysis for September 1, 2009 by Idan Koren

VISIT: WWW.STOCKTOCK.COM for intraday commentary Today we looked at the last week's action and how shorting the stock market and buying cheap calls for protection is probably going to pan out very well. We also own JPM puts and SPY puts. We look at the longer term ramifications and how the charts are showing a lot of bearish patterns which can eventually take us to the 825-840 buffer zone and maybe even new lows down the road. While a lot of people think that this market is going to either move up or crash hard, we believe that the pace of the downtrend will begin very moderately but will speed up once the wedge support line is broken. We also look at the SPY, XLF, AIG and GLD.

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[uckfayu]

Much appreciated Idan, and that makes sense to me. I just hope it happens ASAP, as summer has been no fun with my portfolio ranging from down 20% to down 45% since early july.

[u05ikoren]

I think 825 will only be seen in months not weeks (maybe end of october) As shown in my video there are three major levels to breach before that happens. The red ascending support line of the wedge which also seems to be around the 960 neckline of the inverse H&S, and then we also 930 and then have the 875-880 levels to breach. It will be tough, but once 960 is broken my confidence level that we go to new lows will go much higher. Best, Idan.

[uckfayu]

Thanks for the opinion my friend, and that makes sense. Still curious to see what Idan thinks, but always open to opinions of my fellow traders. I'm thinking that if we can ever get 3 strong down days in a row it will be enough to cause panic and the avalanche will commence. If they allow that to happen or not is the question. But if it takes up to 2 months as you mention, I can handle that, although 3-4 weeks would make me happier.

[IsaacB5679]

whew.... was getting worried there'd be no more videos!!! :-)

I sold SDS and DXD at the 880 level before the rally, re-bought on Friday..... just in time it looks like!!

[kenji4861]

825 is almost another 18-19% lower than our current state. I'm putting words in his mouth, but if we're seeing something similar to January.. you should see it in another 1-2 months.

[uckfayu]

Hey Idan, Its your old buddy here who went short in May and hold FAZ, EEV, SRS and TZA. I was able to short cover a bit but am down on average 42%. If we hit 825 on the S&P or 8000 on the Dow I would most likely pull even. I'm having a feeling this could happen this month, possibly even in the next 2 weeks. I know nobody has a crystal ball, but If you were to guess on that, how long would you say it might take?