It looks more and more that spx will do option 1. I won't be surprised to see spx running higher to even a new ATH either today or tomorrow (which will create a perfect opportunity for cheap puts) just to drop from there like a stone. The FED rate cut tomorrow could be used for this action, regardless of the size of the cut.
ok, so market couldn't make a new ATH. Tomorrow is make or break - if spx gets above 3022 probably there will be no big drop over the next week. However, if it heads lower, it keeps the deep drop option on the table.
Current Elliott Waves - Bears had many chances to take it down but they failed each and every time, so while the bear option is still on the table, the bull one gets stronger every day.
Therefore, I started to do a tentative counting of the uptrend to see where we are. Unless, it started the leg C on Sep. 19 at 2022 (which has a low probability because the drop from 2022 is suspiciously slow and shallow), I believe that SPX put is so far black waves 1-4 and will probably finish red wave 1 in 1-2 weeks. The top for this wave might be around 3040-3050 (big inflection point), not very high above the ATH of 2027, so I expect a quite choppy week.
What it basically means, is that the drop/correction is coming but in a week or so and it won't be as deep as a potential leg C (it should stay above 2825 otherwise it will invalidate the bullish count).
Do not use Elliott waves for short term trading - they work properly for longer term trading (i.e. 2-3 months is the best)
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