Last week, based on the system’s signal to SHORT the market, I bought an XSP (S&P 500 Mini Index, which can be traded almost throughout the day) Aug 16 '24 543 Put. The implied volatility (IV) of the S&P 500 isn’t that high yet, and the risk-reward ratio for this trade is quite suitable. Let’s see how the market moves.
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SPY made it back above the 50dma on Friday, with the low also just above the 50dma. This is a sign of some hope. NAZ could not make it back above. Both still below 21dma of course.
Mike Webster of IBD says…
SPY and QQQ below their 50-day retracement and “living below it”.
“Webby RSI” for SPY is in the “bad zone” (no surprise). Time to be cautious. Naz even worse, but so much so that you are looking for an oversold bounce in the form of an upside reversal.
Webby’s ATR line is just in the yellow area for SPY but deeper in for the Naz
There is a belief that short sellers like to push on the gas when an index or stock gets near the 50dma because once it goes below, Algos and chart traders will sell, thus driving the chart down more. The fact that SPY closed above the 50dma should give pause. But if it does fall below again on Monday, holders might sell more and shorters might short more.
Conversely, if it bounces Monday mornings, shorters will think they are wrong and start buying back.
I have predicted everything, so I will be right 
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Buying put options doesn’t require short covering like traditional short selling does. We opened the position because the odds and risk-reward ratio are favorable. Currently, we anticipate that market volatility will continue to rise, so we are buying puts with a small position. If the market starts to decline (accompanied by a spike in VIX), this position can benefit from gains in Delta, IV, and Gamma. However, if there is a volatility collapse (which we haven’t seen any confirmation signals for yet), we will short volatility. At this point, we are reluctant to go long on the S&P 500 because the risk-reward ratio is not very attractive. Happy trading 
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