A Few Thoughts on $SPX

So, hum. I have been hoping to see the diagonal form, but it’s not seeming to (the red structure). And instead, we’re sort of forming a descending triangle perhaps (the green structure):


A couple of things we might do with that.

Under normal conditions, descending triangles should be bearish. And they are typically found either in 4th waves or B waves. If it’s a 4th wave, we may do this (and I’ve noted some criticisms on the chart):


It’s also sort of “big” compared to the not-really-existent blue “2.” But, if we drop to around the red trend line, then find support, that’s what I will do with this.

But since it’s big, maybe it’s a “B,” and so we may be in a strictly-speaking “corrective” decline (though that doesn’t mean we can’t still take out the October lows, there’s no limit, it’ll just be harder to try to count).

In this case, we can do this:


That would be a bigger drop, if it’s an A-B-C, as we’re only half way through the move, and not nearing the end.

Is it possible to go straight up? It is, but I never now how to count things like that well. It would involve putting the blue 5 of green 1 from the first chart in very high, as a “truncated” wave, or something else strange.

So, triangles are unclear (a feature, not a bug). Would have been nice to see a leading diagonal, as I would have had greater conviction on what might unfold. But now I have little conviction. So, my plan is this (personally): I’ve already taken off 2/3 of my puts, and I’m glad to have done that, because I took profits before the confusing part started lol. I will roll the rest to a future date, adding a little over a week in time, so that I can accommodate a “green 2” if we’re going to get that. But I will have them on in case we simply drop.

I would much rather see a retracement for a 2. I never trust downtrends without them. But, I will try to play along with what I have on, I just don’t want to have a full position on without a more obvious 2. I’ll let you guys know if I see anything else.

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