Some Fib Work and Positioning Changes

Just looking at some fibs here on the S&P. Regardless of whether I will ultimately adopt the longer-term bullish count (which is what’s depicted here with the pink 4 being put in), I remain interested in the 5-wave count in green, at the very least. That 5-wave decline may also just be a “1” (to the downside) in which case we could see a retracement for a bigger “2,” and if it doesn’t stop sooner, there is a fib just below that can stop it, too (at 4086). I don’t like the “1 already in, and the green 4 is a 2” count (depicted in the 3rd chart here) because there is strong divergence at this low, inclining me to think this move is ending soon.

SPX

There may be other ways to count this that can see a low form sooner, too.

But here’s what I am going to do. In the bearish case, we should still see a bounce. But I am actually becoming increasingly intrigued by the bullish count, too. Just because of that Wyckoff pattern. It looks good until it doesn’t, and right now it does look good. That doesn’t mean I’m frothing with bullishness. But it does mean that I accept the risks of a possible markup.

So, because the bearish count should involve a bounce, and because the bullish count will involve a whole lot more, here’s what I’m going to do (don’t necessarily take this as trading advice; it’s just what I’ve chosen to do): my longer-duration puts are at the best prices they’ve been, and I’m going to clear them all.

In the bearish case, I should be able to take them back at better prices anyways. But in the bullish case, I won’t get these prices for them ever again. So, I’m closing the long duration short and will see what develops on the chart. If the market is really bearish and we’re destined for 3000, I will have plenty of opportunities from here to there to play the short side. But, I’m going to take profits on these for now.


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