$SPX Update

The bearish view is that we’re in blue “c” down. If so, we may be completing orange 1 of what could become a 5-wave impulse down. (It’s also possible that orange 1 isn’t done yet). But, at any rate, this view suggests that once that is complete, we should get something (either a retracement or consolidation) for orange 2, which will fail again taking us to 3400:

SPX

The bullish view is that we’ve completed this monster structure and kissed that fib 1:1 on the lips this morning:

SPX

On this view, we need to see institutions show up. It is possible that unlike other times we have seen this structure we’re in (see this), this is an accumulation low, institutions are present, but only passively (absorbing supply until it is exhausted instead of giving us a “V-Bottom”). Accumulations tend to end with a “spring,” a violent move to scare the bejeezus out of everyone. That might be today:

SPX

As noted in the Discord, I sold calls against my long calls on the open (because of these concerns) and kept the puts. Also noted in the chat, as we approached this 1:1 fib, I trimmed some of the puts I took yesterday and opened some short term calls in case we bounce. I have some things pointing in both directions, so let’s see which way we’re gonna go. If we get a bounce, and it looks weak sauce, then it may fail and we can go to 3400 (which everyone is expecting, and they might be right). If we see something more powerful, then it is possible to have a low in place. We have verified a GDP contraction, but markets are forward-looking, and it’s possible that we’re no longer contracting (note the continuing improvement in consumer sentiment, for instance).

So let’s see!


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