Where's the bottom? Time will tell when the bounce will occur; in the meantime the waters are way too dangerous for a short term trade entry.
Saying that the first two trading weeks of January have been volatile is putting it mildly; parabolic is more like it. In the last 6 trading days SPX has dropped 125 points, and the next support level is the August low at 1867. This would be a "likely" place for a bounce; but that is too hard to predict at this point.
SPX 6 month chart
Futures are flat this morning as of this writing, but if the pattern for the week continues, we could see a continued selloff into the close later today.
As you all know, I trade full time for income so it's never an easy decision to remain on the sidelines for the weekly trade for two consecutive weeks. However, I am not willing to throw my hard earned money at the market, either. To quote the legendary trader Jesse Livermore: "Play the market only when all factors are in your favor. No person can play the market all the time and win. There are times when you should be completely out of the market, for emotional as well as economic reasons."
This is a very dangerous market for short term, non-directional trades such as the weekly Iron Condor, so there will not be a new trade entry Friday. There is the added risk of a three-day weekend; the markets are closed on Monday. Topping off the long weekend is the release of China's GDP and Industrial Production on Monday evening which could add to the volatility on Tuesday.
In summary, there will NOT be a new trade recommendation for a weekly Iron Condor Friday. We will continue to manage the SPY monthly position, and depending on the market "may" venture into the February RUT monthly Iron Butterfly next week.
As always, stay keen on your risk management and trade carefully,