As predicted the market has forced itself up to around 294 here at the Fed meeting... now what?
The 1.618XA extension of the bearish crab shown marks today's high while the 2.0 extension (anything higher and the crab is invalidated) is right at 295. I've drawn the fib retraces to start from 294 where the final gap to be filled from the May selloff is. Reason being the .382 and .618 retraces from there all line up nicely w/ gaps and important levels of support and moving averages. My guess is we either get a rug pull tomorrow (gap down and run) or an exhaustion gap at 294. Short term PT is around 286 to retest the 32DMA (orange dotted line).
Personally I feel like QQQ is a better short since it's more exposed to fears of trade and regulation of big tech, but whatever suits your fancy. Either way I think we start retracing back down soon, no later than July 1. It's possible we just meander up here under the ATH until a blowoff top that Monday from some kind of BS trade truce just like back in December.
In any event, the expectation that we'll get an accommodative Fed that will cut rates as the market keeps notching all time highs is absurd. If the reaction to today's meeting was truly bullish, you'd have seen a much stronger reaction like back in January. The fact that it couldn't even close the gap at 294 suggests to me that the algos were programmed to sell everything at the 1.618 extension.
I've been scaling into July 19 290 puts slowly but if it starts moving into the red box then it's time to start getting aggressive. Otherwise the safe play would be to short it on a breakdown and throwback from the red median line. 2hr chart is showing divergence on pretty much all oft-used indicators.
The 1.618XA extension of the bearish crab shown marks today's high while the 2.0 extension (anything higher and the crab is invalidated) is right at 295. I've drawn the fib retraces to start from 294 where the final gap to be filled from the May selloff is. Reason being the .382 and .618 retraces from there all line up nicely w/ gaps and important levels of support and moving averages. My guess is we either get a rug pull tomorrow (gap down and run) or an exhaustion gap at 294. Short term PT is around 286 to retest the 32DMA (orange dotted line).
Personally I feel like QQQ is a better short since it's more exposed to fears of trade and regulation of big tech, but whatever suits your fancy. Either way I think we start retracing back down soon, no later than July 1. It's possible we just meander up here under the ATH until a blowoff top that Monday from some kind of BS trade truce just like back in December.
In any event, the expectation that we'll get an accommodative Fed that will cut rates as the market keeps notching all time highs is absurd. If the reaction to today's meeting was truly bullish, you'd have seen a much stronger reaction like back in January. The fact that it couldn't even close the gap at 294 suggests to me that the algos were programmed to sell everything at the 1.618 extension.
I've been scaling into July 19 290 puts slowly but if it starts moving into the red box then it's time to start getting aggressive. Otherwise the safe play would be to short it on a breakdown and throwback from the red median line. 2hr chart is showing divergence on pretty much all oft-used indicators.
Commentaire:
Wow... insane overnight pump. Gold, bonds, equities all rallied... somebody's gotta be wrong in the scenario. It's not like the Fed surprised anyone with good news yesterday. Surprised that the market is buying the expected news.
Commentaire:
Looks like we'll probably grind up in this wedge between the upper channel formed by this potential H&S pattern and the median of the schiff channel all the way up to the July Fed meeting. I'd say selling calls is a better strategy when shorting at the top here vs. buying puts.
Commentaire:
