Long Term: In the long term, winter is coming. The market would correct. It has been a hell of a rally post the covid lockdown in March. It has to correct. The correction has to be significant. The market has moved around 4,500 points in that period. It has to correct in that proportion.
Medium Term: Once the extending wave 5 (of the July started rally) ends, the market should correct. From July, the market has rallied around 2,000 points. So the correction should be of that order.
Short Term: No one really knows where an extending wave ends. To me the next important level seems to be 12,341. Then 12,622. Then 13,075. We should be trying to set up shorting levels at those points.
How would I trade this: Buy put options with the strike prices of 12,341 and 12,622 and 13,075. Fingers crossed.
As always. I could be right. I could be wrong. I am always learning. Trade at your own risk.