Here’s The Weekend Thought

So I think I have a good understanding of this structure we’re in. We’re in parallel rails (red) heading lower, a good sign this is a big impulse wave down (you can see those rails more clearly in this post).

I believe that stupid shit we were just in was a violent expanded flat for Primary (pink) 4 that followed on the heels of a regular flat for Intermediate (orange) 4 (of Pink 3). And so we should be in Primary (pink) 5 now. My target for that is the pre-COVID high.

We hit all these perfect fibs today (discussed here, and then here). That meets all of the ideal characteristics of an impulse wave, hopefully now complete. If it is complete, I believe it is Intermediate (orange) 1 of Primary (pink) 5. From here, I expect Intermediate (orange) 2, and I think it may play out like this:

SPX

If we rally early next week, we should be in Green A, after which we should see a Green B, and then a Green C to complete the structure. I am hypothesizing that it will take the form of a head and shoulders pattern in this channel (as I’ve drawn it above).

It is possible for Green A to touch the lower edge (50% retracement) of the orange box (expected retracement for a “2”). Doing so may produce a trap, because after today’s drop, it will look (to many) as if orange 2 is complete—if we touch that, like this:

SPX

But I think they might not make things so easy and they may destroy another week’s worth of OTM puts. So, I will be looking for the Green A, and then I will watch, and if we find support around my proposed neckline, I will be on the lookout for the Green C. It may even puncture the channel, to really freak people out. Maybe look convincing.

So, that’s the plan. Because we hit the wave balance I anticipated today, I closed my puts and took a few calls in an attempt to play the Green A. So let’s see what happens.


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7 thoughts on “Here’s The Weekend Thought”

  1. Sold a bunch of $364 puts in the morning so I’ll be the lucky owner of a bunch thanks of $spy Monday. I’ll sell a bunch of calls around your orange box and hope to get assigned ;). Wash, rinse, repeat, tendies 😂

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