So, still not too sure how things can play out. But, the weakness this morning had me worried, but it’s not too bad just yet. I was worried about a liquidation break and I don’t really see that. Momentum to the downside does look like it’s slowing. And, I’m going to redraw the bullish wedge as below (red structure). And it looks better than the failed one I saw this morning. This can be a productive pattern.
I’ve now taken a few puts, but I have also retaken my calls back at better prices. But this way I will have something facing in both directions. And I won’t open any credit spreads for now. So long as we stay above the prior lows (green arrow), there’s still a decent chance for a rally—in my opinion.
If this fails, it can fail in a big way, but with the 3 million contracts traded the other day, we still need a lot of fresh sellers here at a low, and I don’t yet know if we can find them or not.
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