Defense

Here are two possible paths from here on the cash S&P500 chart:

The red one is the one I put my money on. However, if the market shows some strength above the red horizontal line today (inside the purple box), I will cut my short position in half. I will cover the rest on a move to new highs. The green path becomes the most probable in this case, with the market extending to 1162 (green horizontal line) before a bigger correction.

I have also circled in blue yesterday's correction. It is 12 points long, equal to two others on the way up from 1040. If the market does not break 1135 cash today, the uptrend is still intact. This fact plus a move above the red horizontal line would make me start playing defense.