$SPX Analysis

My basic views remain unchanged at this time.

I continue to believe that we have either finished intermediate (orange) 2 already, or still have one more push in order to finish it. Despite today’s bloodbath, I think I still slightly favor the bull’s here (in the shorter-term). Coming this far without hitting something special, like the 200-day SMA still seems off to me. And this move post Fed seems to me to have been widely expected.

If the top is in, we would count it like this:

SPX

And we would expect a move to 3400 next. We won’t go there in a straight line of course, but if the top is in, any rally should be sellable. I have prepared myself for this possibility by means of a raft of December SPY puts.

That said, it’s not easy for me to count the decline from this rally’s high as an impulse wave down, and I think it should be one if we’re very bearish. And this whole topping pattern looks very much to me like a “flat.” If it is a flat, the decline is countertrend and it leaves open the possibility that we can still go up.

The bullish view is still this:

SPX

There is very good wave balance at today’s low (the blue a-b-c leading to Green B). So, I can’t rule out another segment to this rally. I am prepared for this with short-term SPY calls, and I attempted to catch a long trade today on futures, but was stopped out. And I am attempting to do so again now (I have a long on now, and I only need to move my stop to a better place if the evening permits it).

Two more reasons I am not impressed yet are:

  1. The VIX gave zero fucks today, and I don’t think that looks right. Somebody knows something. They always do. And it should be going up here.
  2. The other reason is this orange trend line on futures; we’re still above it:

ES

If we don’t lose that trend line, we easily can still go up. If we do lose it, so be it, let’s do that instead. But, we haven’t lost it yet and so I will remain open to upside as a precaution. I remain long-term bearish, but simply want to make sure that we’re headed lower and I’m not sure yet.

And one more thing that’s very odd is Bitcoin’s lack of participation to the downside. So, I’m not trying to be like: “we could go up, or we could go down.” Rather, try to think of it like this: I think we almost certainly will go down eventually, but between now and then, there is still a good chance to see more of this rally first. That’s my thinking here at this time.


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2 thoughts on “$SPX Analysis”

  1. I’d love a little spike to open new shorts since I’m being assigned on my spy puts tonight … but I really don’t see it happening other than “shit has been sold hard” lately – and my P&L is very thankful for that. Also I can’t not see that giant H&S on the 2H chart … to be continued!

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