Doesn’t Look So Hot

We had a wall into the close, and though those can often gap up the next day, the exception to that rule is Fridays. Those more commonly see followthrough on the Mondays that follow them. I’ve been rooting for the bulls because of my sheer disgust for crowded trades, but something troubling has happened in the last 24 hours. Most of the bears I follow who were looking for a deep dive just a few days ago, are now looking for this to be the final leg of something. Like just a few points below us should be the end of some “3” or something. I suddenly don’t actually see a lot of folks looking for a deep plunge, and the opposite was true just a short while ago.

I suspect I know why. When most were trying to count the structure as a super nest of ones and twos and ones and twos, looking for the 3rd of the 3rd, they got tripped up and slapped around by this thing that does, in fact, look like a triangle (green structure in the chart below). And having taken a bruising in that structure, they now think that was a “4,” and we’ve entered a “5” (of something—their respective analyses are all a little different). And in this case, wave 3 isn’t very big, which means wave 5 shouldn’t be very big, and it’s already getting big, so they must be concluding that we’re about done here:

SPX

Read more “Doesn’t Look So Hot”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


An $SPX Update

Yesterday I complained about the lack of balance between the waves formed yesterday. From that, I couldn’t easily justify the bearish 1-2 count (in orange).

This morning, we have now hit balance between the red waves (1:1), so I can at least justify that now. If we plunge deeply, we may be in orange 3 that may send us as low as the 3430s. I don’t yet know that we’re going to do that, but the wave balance at least lets us now.

SPX

Because of this shift in probabilities, I will add a few more puts and I trimmed some calls just in case. It remains possible that we go shooting up, too, as the market is oversold and sentiment is dogshit right now.


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Plan for Tomorrow (and Perhaps Further Out)

Ok, we have some inflation data coming in the morning, and that can be a market mover. The rubber band is very stretched right here. If data disappoints, the rubber band can break and I think the move to 3400 is possible. If data pleases, I think we can expect a real ripper. I am open to both. Given  what I saw today (such as the $VIX H&S, etc.), I favor the bullish view, and I have tried to tilt my positioning so that that outcome will be more profitable. But I should survive either outcome (lol watch us pin).

If we fail, I will just be basically looking for a more or less straight line to 3400. If we rip, I think the major low is probably in. If we get any traction to the upside at all, I doubt we’re going to stop. Sentiment is suicidal here and we shouldn’t be coming back to this for a long time. And if that’s right, here is what I would expect over the coming weeks/months.

If we take out this high (green arrow) and break these parallel rails to the upside:

ES

Read more “Plan for Tomorrow (and Perhaps Further Out)”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Post-Market $SPX Discussion

One way we can count this supremely bearishly is like this:

SPX

Read more “Post-Market $SPX Discussion”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


And One More $SPX Update

Carrying the thoughts from earlier forward again.

If this is a “1 down 2 up,” we should be entering the 3rd wave down. It should be a doozy. that said, I am not thrilled that we have made an “h.” Peter Reznicek calls them “hell for shorts,” because it can mean that they’re unable to gain traction to the downside.

SPX

Read more “And One More $SPX Update”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Another $SPX Update

Carrying the thought from earlier forward. If we’re in a little “2” here, the 1:1 relationship is just above us (the orange line), and a deep failure there (or sooner) would tilt to the bearish. But a “2” can also typically retrace 50-61.8% of the decline it is retracing (the orange box). If we go above that, that begins to call “this is a ‘2’” into question. And above yesterday’s high, it seriously calls the bear case as a whole into question. I doubt they will show their hand that obviously. More likely we will close in the range somewhere. Where if we’re bearish we damned near limit down, but if bullish, damn near limit up lol

SPX

Read more “Another $SPX Update”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


$SPX Update

The bearish view is that we’re in blue “c” down. If so, we may be completing orange 1 of what could become a 5-wave impulse down. (It’s also possible that orange 1 isn’t done yet). But, at any rate, this view suggests that once that is complete, we should get something (either a retracement or consolidation) for orange 2, which will fail again taking us to 3400:

SPX

Read more “$SPX Update”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


A Quick Review

I have been open to a variety of possibilities, so I want to bring them together in a summary to help everyone have some clarity. I don’t want people to think we’re all wishy-washy. New information is provided to us each day by the market and I like to listen to that information as it emerges.

So:

  • The August rally was greater than expected and yet, even if the market was bullish, a retracement was a reasonable expectation and so I was glad to be bearish going into that top. That worked out well as we were then gifted with Jackson Hole.
  • I exited longs a little early, but we were met with a sharp rally that I participated in leading into the CPI print. At that point I was inclined to think Jackson Hole was a “1” down, the retracement a “2” up, and that we were entering a “3rd” wave down. And so I was again happy to be short into that, and we were then gifted by the large gap down.
  • Soon after that, though, we struggled to take out the early September lows, and it no longer looked like we were in a “3rd” wave down. We had a huge volume spike there, momentum was slowing, breadth diverging with price, sentiment screeched to multi-decade lows. All signs pointing to a bottoming process.
  • Because of all of that, I was inclined to be bullish going into the FOMC. That part I got wrong as we dropped again from there.
  • From there, what do we do? Reassess things, and in this slop we’ve been in, we still have that volume spike, which usually occurs near major lows in terms of time—if not also in price. In this case, it was still close enough in time, though not so close in price. But we still had it, breadth continued to diverge, sentiment worsened, and a broad consensus developed that we could crash.
  • Most of time time, the market does not give the majority what they want. I don’t make those rules. There are exceptions. May was an exception. Most analysts were looking lower and we went lower. Most analysts are looking lower here, too. Sometimes the exact opposite can happen at places like this. I see a lot of people insisting that we’re headed lower, and I’ve seen that shit blow up so many times that I don’t want to insist on anything.

Read more “A Quick Review”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


And Just a Couple More Thoughts

The reason I’m more open to further downside now is the lack of a strong reversal at these levels. I’ve had good fibs in several places now, but no reversal. And that 1:1 relationship we’re at now is deeper than I wanted (because below the June low—which I expected to hold) but it was always a worst-case scenario, but where’s the real rally?

And I also don’t like these structures we’re in now.

We’re in this thing:

SPX

Read more “And Just a Couple More Thoughts”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


An Alternate (and Target) If We Breach the Lows

I want to pick up the thought from earlier this evening. I suggested that it’s possible that a low is in. But also that there’s some things that bug me about that thought. I do sort of think that when we bottom, we’ll have a 200-300 point intraday green dildo candle. Maybe, let’s see.

At any rate, I like the idea of a retest of the low to hit that magical fib. But, it’s still odd to me that we broke the June low, which I don’t think we should have done. It makes it possible that that was warning us that we may head deeper. Given the sentiment at that low, a low like that should have held, and there should have been big buyers there, and there isn’t yet and we’re at that spot.

So, I know what I’ll do if we keep going up. I also know what I will do if we hit 3621 and get the big green dildo candle. But will a simple retest of yesterday’s low really be a good bear trap? I’m thinking maybe not. What if we break 3621?

I need to have a count that I can use that has good internal and external fibs—but lower, and so I’ve done that work tonight. We can count the whole structure (still as a big A-B-C), but with a whole host of fibs coming in right at about 3400. The broad view is this:

SPX

Read more “An Alternate (and Target) If We Breach the Lows”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.