This market's a bit of a beast right now, and we haven't seen a move this messy and overlapping since well prior to the August flash crash. Today we're going to look at BKX for the options, because this index has claimed both its most recent prior swing high and prior swing low, which are two things SPX has not done yet.
One point that we haven't rehashed in a while is the ongoing possibility that the rally from October to November was all part of the C-wave of a large flat. Because BKX has NOT reclaimed its November high, which came at a key infection point (specifically: after five complete rally waves, as noted on November 9), that bearish intermediate option remains very much alive from a technical standpoint. Therefore, this remains a significant technical inflection point in the big picture, because if that rally was simply a C-wave, BKX would be expected to break the October lows.
Due to the nature of the near-term pattern, though, more sideways chop wouldn't be at all surprising. In my opinion, the current wave is one of the most unpredictable waves we've seen for all of 2015, so we'll simply have to await a bit more information from the market. Note that the options on BKX and SPX should be similar. Trade safe.
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