A Few Thoughts on $SPX

We had excellent five waves down with good fibs on Friday, and I expected a rally from there. Instead of getting that, we’ve had all this war escalation and continued weakness today. Today is hard for me to count, given the clear 5 waves from Friday. It’s possible that today is 5 waves down, but I’m not sure of that, and the fibs aren’t as terrific.

I like that we retested the 200-week SMA and got a reaction from it. But I’m not sure if I can count that reaction as an impulse wave.

On this view, we may have orange “W” in, and we may be working on early stages of a big “X” wave. If we are, the big rally we just had last week might have been Green A, and we may be in Green B now. It’s possible that the decline on Friday and today is blue “a” of Green B, like this:


This is what I am generally positioned for. But I am not sure about this until we see more upside.

I am also not super excited about the VIX being perched up on this wedge like this:


In addition to my majority long position in SPY calls, I have taken some puts as a hedge until I am more sure of a bottom.

Both the Russell and Dow futures hit their respective Pre-COVID highs from beneath today, and so far remain beneath those. So, I think we should rally from here, but I am by no means sure of that at this time.

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2 thoughts on “A Few Thoughts on $SPX”

  1. I also think we should rally at this point, but according to upcoming CPI YoY CPI expectations at 8.1% and Clev Fed Nowcasting estimates at 8.2% we ain’t gonna get it… and if we get a few points up before Thursday, better take profits quick…. And although history usually repeats itself, sometimes it doesn’t…

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