The entire 2019 rally appears to be a 1.272x mirror image of the 2018 ABC selloff waves. Since I believe we are in a D wave of a large corrective expanding triangle, I expect the current rally to be a 5-3-5 corrective wave, where we are currently in a sub-wave 3 (or 4, if you think we're already turning around).
Notice how each wave of the rally has been roughly a 1.272 extension of its mirrored wave from the 2018 selloff. If this theory holds true for the current wave C, then we are currently mirroring the Oct 2018 wave A impulse which implies a projected move of 435 pips from the August bottom of 2773, giving us a target of around 3210.
I think we are at/near a short term top. 3112 is the 1.272 extension of the 2018 selloff and I think a retest of the previous ATHs around 3020 is needed before a move higher.
Current strategy: Dec 31 310/295 SPY put spreads + scalping Jan 31 SPY 311 calls on dips. Accumulating calls @ 3020 and lower. 2950 is crucial support, a daily close below it would be devastating for markets on a technical basis.
Make no mistake about it, on a fundamental basis being long at this point is to be a willing participant in a Ponzi scheme. Supporting indices like consumer discretionary and transports are screaming danger ahead, the VIX is bottoming w/ record levels of short positions, and AAII investor sentiment is once again back in +40% bullish territory. Liquidity from the fed repo op + speculation on a meaningless "phase-one deal" is creating a massive asset bubble that makes naked shorting suicide.
I feel like the time to go full bear is pretty obvious. Sell the news on the signing of the phase-one deal... especially if this happens to coincide w/ my 3210 target. You don't wanna miss the wave E if you're a bear.
Notice how each wave of the rally has been roughly a 1.272 extension of its mirrored wave from the 2018 selloff. If this theory holds true for the current wave C, then we are currently mirroring the Oct 2018 wave A impulse which implies a projected move of 435 pips from the August bottom of 2773, giving us a target of around 3210.
I think we are at/near a short term top. 3112 is the 1.272 extension of the 2018 selloff and I think a retest of the previous ATHs around 3020 is needed before a move higher.
Current strategy: Dec 31 310/295 SPY put spreads + scalping Jan 31 SPY 311 calls on dips. Accumulating calls @ 3020 and lower. 2950 is crucial support, a daily close below it would be devastating for markets on a technical basis.
Make no mistake about it, on a fundamental basis being long at this point is to be a willing participant in a Ponzi scheme. Supporting indices like consumer discretionary and transports are screaming danger ahead, the VIX is bottoming w/ record levels of short positions, and AAII investor sentiment is once again back in +40% bullish territory. Liquidity from the fed repo op + speculation on a meaningless "phase-one deal" is creating a massive asset bubble that makes naked shorting suicide.
I feel like the time to go full bear is pretty obvious. Sell the news on the signing of the phase-one deal... especially if this happens to coincide w/ my 3210 target. You don't wanna miss the wave E if you're a bear.
Commentaire:
Fun w/ fib spirals using 3210 projected target... will we see the 2100s in 2021?
Commentaire:
My PT for leg C here was 3209-ish. There's a bearish deep crab from the aug/sep corrections w/ 1.618 extension at 3211. Let's see if this area concludes the mirrored move from last year's selloff...
