Two Possibilities For $SPX

Looking at today’s price action, it may be that the volatile session was a small triangle with an abbreviated “E” wave. I have been considering a larger triangle (here), which is especially visible on the futures, but the Globex session tonight gapped up above the upper trend line of that, and we’re now pressing through the 50-day SMA, too. IF that persists into the open, here is how I would count the cash session.

One option is this, where we have seen the A and now B of the orange degree, and are in the C (of Pink B) now. There is wave equality at 4082.34, so I will be interested to see if we get a reaction there. If we don’t, I will look to higher fibs above 1:1.

SPX

The alternative is that this 3-wave advance turns out only to be the Orange A of Pink B, instead of all of Pink B. In that case, I would expect something more like this:

SPX

IF we don’t have an overnight failure (and we might, i don’t know), we will be above 4000, above the 50-day SMA, and I would be inclined to give it some space to run a bit.

If we do open high, I think I would expect most market participants to expect the first chart above, which may make the second option even more possible. I am unsure.

If we have an overnight failure, I will be inclined to count this thing we’ve been in as a “flat” with the Pink B being done, like this, with a slightly truncated green 5th wave (of Orange C of Pink B):

SPX

[Edit: Actually, in hindsight, it wouldn’t be truncated, because the top of green 5 is actually above the top of green 3—the triangle mash in between all that is irrelevant].

I remain strangled at the moment. I did add to the put side, making it more of a ratio, rather than a strangle with equal legs, as I was feeling bearish near the close, but if we gap up sufficiently, that shouldn’t hurt too much as the call side is close to the money even now and the deltas will really run in my favor very quickly..

So, if we gap up, fine, I will probably give it some space, let it run for a bit, if we don’t, I would expect us to lose that orange trend line below us soon.


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