We are finally entering the short zone! This market is ready to short in the S&P 975 to 1010 zone. I fully expect it to crest over 1000 since markets love to take out round numbers, but the best strategy is to average in your shorts. I plan to scale in as follows
- At 975 - 10% of your position
- At 985 - 25% of your position
- At 1000 - 30% of your position
- At 1015 - 35% of your position
This is a progressive averaging in that will give you an average cost of S&P 999 if all the position entries are hit. I believe that our stop should be in the 1040-1050 area (a maximum of 5% risk).