There are two factors that are in the bulls favor over the next few days. The first factor favoring the bulls is that during previous corrections since the March lows the market did not head straight down but rather chopped around the highs for a while before heading down. The second factor is that this week is option expiration.
The first factor is self explanatory but I wanted to elaborate on option expiration. Strong trends tend to persist through option expiration. Often the day after option expiration will serve as a turning point. I have some pet theories on why this occurs but nobody knows for sure. Some say that the market will only go down after people's downside protection expires. I theorize that expiration might serve as a capitulation point for those fighting the trend through options. As expiration approaches one is forced to make a decision whether to throw more money into a losing trade or to capitulate.
So why am I persisting in betting against the market and not waiting until expiration? I believe there is some meaty downside, whether it occurs before or after expiration. I don't want to lose a position that I believe will eventually make a good profit trying to be cute. In addition, for a down day yesterday had a lot of call buying. Had we seen put buying yesterday I would have been more willing to take off the position temporarily.