Another $SPX Update

Carrying the thought from earlier forward. If we’re in a little “2” here, the 1:1 relationship is just above us (the orange line), and a deep failure there (or sooner) would tilt to the bearish. But a “2” can also typically retrace 50-61.8% of the decline it is retracing (the orange box). If we go above that, that begins to call “this is a ‘2’” into question. And above yesterday’s high, it seriously calls the bear case as a whole into question. I doubt they will show their hand that obviously. More likely we will close in the range somewhere. Where if we’re bearish we damned near limit down, but if bullish, damn near limit up lol


Getting my hand slapped after the FOMC makes me aware of the dangers we might genuinely be facing. But the contrarian in me also knows that the outnumbered bulls can take over here and do really mean things to the bears (ok, it’s the PTSD talking).

But really, I can accept either outcome. It’s impossible for me to be perfectly convicted here because this is both what the moment right before a big drop can feel like, and it’s also just what coming out of a low feels like, too.

That we took out the low is good for the bears. If the market is bearish, it should be making new lows. But we didn’t do it by much, and that’s a little bit of a concern. When I posted this, I recognized that I needed a count in the event of a serious breach of 3621. I was expecting a failure this morning to look more like this:


A breach of the channel for the little orange 1, then a retest from beneath for the little 2. Then we gap down in the third, etc. Instead, we hit that golden fib right on the kisser and have rallied. The bullish thought I discussed here ended up playing out on the money. If that holds (3621), I will be inclined to be bullish. If we break out of these rails to the upside, I will be very inclined to be bullish. The bad news is that if we’re bearish we may not know until tomorrow, because we could simply gap out this range to the downside. So, calls and puts. Whichever way we go, I will simply start rolling the contracts, treating the roll like a little ATM machine. That’s the thought. The leverage of options should do the rest for me: one side will eventually easily make up for the other.

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