Two Thoughts on the S&P 500


Thought #1:

We didn’t get the 5-wave continuation I thought was possible from yesterday. That said, the puke and recovery on futures in particular looks sort of like a 1-2 (in blue). If it is, we should continue to rally well above both 4000 and the 50-day SMA and we would likely go to the orange line above as the typical target for a wave 3:

ES


Thought #2:

That said, on the cash session, since the dump this morning did not overlap Tuesday morning’s high (where the little orange 1 is), this volatile structure may also be an a-b-c expanded flat (in blue). There is wave balance at the orange box if we get that high. If we ultimately reject the 4000 area or the 50-day SMA (even if we breach them briefly), we can fail somewhat sharply from here as well.

SPX


I can’t easily pick. I have rolled the calls I took yesterday to a higher strike, now that they went ITM, I have closed the bull put spread I opened yesterday morning, and I will take some long puts, creating a de-facto strangle because I can see it going either way still (for instance, the Russell remains in breakout territory, etc.).


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