$SPX Update

If we were facing global catastrophe and they had wanted to rug us, doing so at the 200-week moving average was one place they could have done so. And the second opportunity they had was at the close yesterday, where we had a good 1-2 setup with the VIX poised in a bull flag, etc. The risk was high, because if we were going to crash, we would have badly gapped through the 200-week, or they could have done what they did yesterday: shove everyone out, then dump overnight.

Since no rug pull yet, and to the contrary, a powerful rally, I am less convinced that we are in danger (though it’s still possible). If we stay elevated, I would expect the low to be in. We may count this an an impulse wave, like this:

SPX

If we continue to move up and to the right over the next few days and get a full 5-wave pattern up, then this will look good. After the 5 full waves complete, we should then see a retracement for green 2. The dollar continues to come down (but remains above its long-term trend line, so there is still some risk). And Bitcoin has broken above its long-term down trend line. That is all very positive. Bear in mind: the last time Bitcoin did this, it was a trap, and I don’t know if this one will be, too.

But, let’s see how this continues to unfold. I have closed my call hedges and reduced my puts. I will now wait to see if we can get a full 5-wave structure here, or whether we suddenly drop—but this feels like a very firm bid.


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