I'm more worried about my Jan 2011 VIX calls, right now, than I am about my Jan 2012 IWM puts.
I bought the VIX calls on December 3rd, when the VIX was just below 18.
The VIX is still in the seventeens, and my VIX calls have lost more than half their value, but if the S & P rises to 1304 in the first couple weeks of January, as your source predicts, then my VIX calls will continue to decline in value until they become worthless (these calls expire on Jan 18th).
I've got 98% faith in him. ONe thing is important....he gives you two scenarios. Currently he is saying today we should test 1250 on the S&P then next week head up or break down. He gives a pivot of 1245 as the tell all. If we hit it an drop further then we are headed downward. You have to read his past posts though even though he predicts 1290-1300 first two weeks of January he also predicts a downward move to 1150 or so after that. That is precisely why you bought you yearly calls right? So I would hold just keep aprised of how low we will go so you can sell before we head upwards again. Don't look at them day to day.
This person predicts that the S & P will reach 1304 by the Jan 10th to 21st timeframe.
If he's right, then I would be wise to sell my VIX puts, which expire on Jan 18th, even though they are down more than 50% from what I paid for them on December 3rd, and I would also be wise to sell the Jan 2012 IWM puts which I bought on Monday of this week (they're down about 3%, or so).
It's difficult for me, psychologically, to sell the VIX puts which are already down more than 50% - it seems like they will reverse direction at some time between now and expiration.
I don't follow the Elliott wave charts (too complicated for me to understand), but Prechter has pointed out that bullish sentiment is at an extreme level right now, and he seems to be very bearish because for this reason, but I've lost a lot of money listening to Prechter's advice, and now I'm continuing to lose more.
How much faith do you have in the person whose analysis you've cited above?
Helen if you spent all that $ you should also have signed up for a service that has excellent forecasting. There's one I'm a member of and this guy is amazing on direction. He's a genius with technical analysis and charges all of $75 a quarter. It's worth your while. He actually forecasted when the market was 1040 that it would go to 1241. I wish I had listened and trusted but after following Prechter for a year and losing my shirt I dismissed his direction. Now I follow. Check it out. http://pugsma.wordpress.com/