Technical analysis shows bearish RSI divergence on weekly charts, exhaustion gaps on daily charts, and a rally on declining volume. The "Fear and Greed Index" is at an extreme (69). This suggests a lack of conviction from institutional money and a high probability of a reversion to a long-term trend line. The author is holding SPY puts, betting on a drop to specific price targets (550-575) within the year. The trend line support could hold without a major crash; political assumptions could be wrong; market could defy technicals and rally to ~610.
Technical analysis shows bearish RSI divergence on weekly charts, exhaustion gaps on daily charts, and a rally on declining volume. The "Fear and Greed Index" is at an extreme (69). This suggests a lack of conviction from institutional money and a high probability of a reversion to a long-term trend line. The author is holding SPY puts, betting on a drop to specific price targets (550-575) within the year. The trend line support could hold without a major crash; political assumptions could be wrong; market could defy technicals and rally to ~610.