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:

Read more “Doesn’t Look So Hot”

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.

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.

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:

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

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

Read more “Post-Market $SPX Discussion”

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.

Read more “And One More $SPX Update”