Market Update for Thursday, August 24th, 2023

Good afternoon, traders.

Well that’s one shitty daily candle lol

The S&P 500, despite pumping over the 50-day SMA during the after-hours, opened just beneath it and proceeded to basically vomit from open to close:

If we had actually gapped over the 50-day, I think that could have been bullish, but we didn’t get it. Also, /ES came within points of its 50-day SMA, and never got over it overnight. Yesterday, I closed my longs and took a small short on /NQ and I began to regret that with the NVDA pump. But, I did that because of the 3 options I discussed yesterday, two of them pointed down, and I liked them better. So, I wanted to see how we might open, and as /ES approached its 50-day overnight I decided to also open a small short on it, too. So, that was fun. I closed the /NQ short today when we approached that trend line and I’m going to hold the /ES short for now, or I might place a stop in above us to secure some profits. But, let’s look at our options, because some have now been removed.

First, gapping over the 50-day SMA and moving back to that channel is dust. Second, this, as a leading, expanding diagonal (and this is what I was playing for), might also be dust now, too, even though it still kind of looks like one:

It looks sort of like what I was imagining, except: by gapping up, the wave proportions may not be right any longer. Wave 3 is the smallest on this count now that 5 went even higher than yesterday’s high. Before the gap up, waves 1, 3 and 5 were all close to equal, which I was going to let pass, but I don’t know if this is right any longer.

But there is a good structure I can see in this now, as an alternative:

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And that fits in nicely with my very bearish option discussed yesterday (I will add to that idea below).

Before I move on to that, I just spent days describing and defending the possibility of a huge macro triangle, and now I’m beginning to have doubts about that so I will now spend the the next few days criticizing it lol. No, but you see, it was a hypothesis, and I liked it, and it was based on a whole nexus of things I thought I could bring together, and they’re not coming together. So, I will describe that a little bit here, what might be going on.

The huge triangle was predicated on the thought that:

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Ok then. That’s what I think here. If the bulls are going to show up and send us higher, they better get cracking. If not, we’ll see how things develop, and by that I mean we’ll see if the gates to hell open and drive havoc and sorrow through the realm of asset prices. I hope you have a fine evening, and I—as always—look forward to seeing you again tomorrow.