$SPX Update

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Happy New Year to Everyone.

Carrying the thoughts from this weekend forward, intermediate (orange) B is either in, or it’s not. If it is in, then the high at December 1st was the high of Orange A, and we’ve already completed a 3-wave swing for Orange B, and we should move up strongly soon in Orange C.

It may be possible that the whole multi-week consolidation we’ve been in has been a single leading diagonal for blue 1 (I may need to raise that by a degree later on), with the gap up this morning being the overthrow of that structure. If that’s the case, then we may still expect another push lower to complete blue 2, after which I would expect a strong rally back to the 4000 area:


The other option I am considering is that December 13th was the high of Orange A, and we’re still in a 3-swing move for Orange B. I would prefer to see more of a rally even if this is the case, but if we don’t get it, this morning’s gap up may have been enough to complete Green B (of Orange B) because we did hit a good fib at the open. If this is the case, we should head lower (maybe much lower, maybe retesting the October low) to complete the structure, after which I expect a very bullish year for equities.


I remain modestly long via futures (with a stop), I still have the longer-dated SPY calls I took last week, and early in the session (as discussed in the Discord) I added a shorter-duration SPY strangle. I wanted to have at least some short exposure in the event that blue 2 in the first chart needs a deeper drop as I’ve depicted it, or in the event that that was Green B and we have a much deeper drop, as depicted in the second chart. So, the put leg of the strangle will go bananas if we get something solid.

Alright, let’s see what we do.

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