I have a 1360 target on the SPX for the first leg lower.
This should be a point that a substantial counter trend rally of 50 or more points may begin.
Short term traders should look to enter SPY put options right here to capitalize on the potential last push lower. Use a fairly tight stop loss on the put options as the SPX should be limited to 1397. Anything above that level and all short trades are off the table.
It took only two days of fairly mediocre returns to bring the small investors back to the super bullish stage as their appetite for Call options has once again inflated to levels that see short term tops within 24 hours of the reading.
This is clearly telling us not to be fooled by the past 2 days of rally in the market and remain defensive. Short term traders should be looking for some short sale and put option plays as this temporary blip up should be very short lived.