Assessing the Structure on Cash

If I try to assess the structure hypothesized about here on the cash session, we might see this.

We have that nice impulse wave down on Friday (which I am labelling as Green A, but it might be a “1”—to be determined). And since that low, we’ve had 3 swings (blue a-b-c for possible Green B of Orange D. If this is right, we may still head to the lower trend line where there is equality of legs:

SPX

I have doubled my puts while we’re still up here. If we get down there, I will halve them and take some calls again, constructing—once again— a de facto strangle. That way, if it is a Green “1” here and we crash past equality of legs (in a Green 3 instead of a Green C), I will still have well-placed puts; but if that’s wrong and we shoot up for Orange E instead, I will have participated in this decline and can play the much stronger bounce.

The only worry I have is that we’ve now probed the orange trend line twice, and rejected lower prices twice, so it’s still possible that none of this is right but I will have to wait to see about that.


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