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IMHO, down to 2600 or thereabouts before a bounce.
I favor this wave count. I think there will be more leg down before the run up during expiration week, just to trap shorts one more time, preferably overnight.
Happy trading folks!
Algol
We did 5 waves down, ABC up and ABC down: 5-3-3. First time we failed at BBCL on the 60-min. I think we try again today and break to the upside. Next week is monthly OPEX, so they we will try to keep the market up till then. In any event, I will be looking for a short position again when, and if, we get to around 2760.
Trade safe folks!
Algol
Wow, who have thought that the market is gonna sell off so hard today! I agree, with the VIX this high, the implied volatility for both calls and puts us through the roof, so stay in cash. But, if you want to trade, buy deep in the money calls or puts, otherwise the premiums are going to evaporate for OTM calls or puts as the VIX drops.
Trade safe folks!
There may be another gap down tomorrow AM.
Algol
I was off by 2 points (2733 instead of 2735), but still close enough! Now we move up until sometime OpEx next week.
Trade safe folks,
Algol
We will get to my second target of 2735 and bounce there. A normal reaction is to return to the 2810-2830 area where we consolidated before the drop today.
I am very sorry to hear that...
Take care,
A.
Sorry folks, I have been out sick all week. I feel better today and I did a little trading. As I said last week, watch for Feb 2! This selling is far from over. My first target to the downside is 2765; my second target is 2735. IMHO, we will get to the second target.
Have a lovely weekend everyone!
Algol
I concur. Next week will be interesting though, and I expect the biggest volatility to occur on Fri - the day after the big FAANG stocks report earnings. However, I do not expect the near term top to occur until the week after when Trump will give his State of the Union speech: he must show to the world how great the stock market has done a year into his presidency. After that, there will be some correction in the second half of Feb.
cheers,
Algol
No trip to UAE for now. I will go to KSA though; my wife got a job at KAUST, so I visit her from time to time.
Take care,
A.
Gotta love the 5th waves! My original price target was too low. 5-5-1 was 25 points. If 5-5-3 = 1.618 the length of 5-5-1, then we are looking for some 40 points advance of this 3rd subwave, which began at 2850. So, do the math folks. As always, MHO. I will be selling my calls at 2890 when we get there. So far no sign of weakness on the 60-min chart since the 3rd subwave began.
Have a great weekend everyone!
Algol.
Red followed by black. These triangles are tricky. We could rise up just to make an ATH by inch and then reverse in an inverted V pattern. Then, we break to the downside. We wait and see...
Trade safe!
A.
Futures channeling up nicely. However, I am a little cautious here as we might just set a new ATH by inch and then sell off. I do not like the candlestick set up on the daily chart. We will see how it plays out.
Trade safe folks!
Algol
True, that is why you need to know the history of the pattern. If we believe that this is subwave 5-4, then we know how the triangle will play out. That is why we try our best to count the EW waves here. ??
It think that is it: the e-portion of the triangle on the 60-min chart seems complete. So, we should advance up now for 5-5, IMHO.
A.
Another triangle unfolding for 5-4. Should break out to the upside soon; we are finishing the e-portion of it.
A.
ECB rate decision shortly. $SPX up some 8 points or so already. 5-5 it is then. Next target 2872.
Happy trading everyone!
Algol
It is still early to tell; we could be in a subwave 2 up. If gap down overnight into subwave 3, then we know what is going on. I am done trading for the day; bought a straddle and will let the trend decide how to act tomorrow.
Trade safe folks!
Algol
2796 is the pivot point on the 60-min chart. That is a decent buy point. First, let us lose the mid-BB point on the 60-min chart...
Yes, it is, and I am counting on it.
This might have been 5-5 complete. This selling looks intense, so maybe new wave down (ABC, with A impulsive decline)?
I was off by 2 points, still close enough. And, so the correction begins... Hang tight!
It seems this way! My upside target is still the same - 2855, then sell off for some 20 points or so for 5-4, and then back up to finish 5-5. 5-5 should take through the EOM, and possibly Feb 1. Most of the FAANG stocks report AH on Feb 1, so watch out!
Trade safe folks!
Algol
Now that we cleared 2840 and consolidate here, the next target is 2855.
Trade safe folks!
Algol
Yes, it is! Give it a couple of months.
I will settle for 2840.
We will get there!
Happy trading!
Algol
My original target of 2827 may be too low. We may overshoot the channel up to about 2847 before this leg up is over. MHO, as always.
Trade safe folks!
Algol
OR, it could be that we are still in the 4th wave correction (some kind of expanded flat, where we completed the B portion of it, and the C leg down is yet to come starting Mon with a gap down. How is that for a possibility?
If no deal on the spending bill by Mon, then expect a gap down on Mon. We need one day of liquidation break to cool down the oscillators from the overbought territory; a downside target of 2760 is not unreasonable. But, this will be a perfect buying opportunity and I expect another hanging man candlestick on a weekly basis. The month of Jan will close at the highs, so I will use any liquidation break on Mon to sell my 279 puts expiring next Wed and go long with calls expiring on Jan 31.
Happy trading!
Algol
IMHO, we will retest the overnight lows to complete the C portion of the 4th wave correction (SPY of around 278.30), then we begin the upmove. These OpEx days are tricky...
Yes, it appears so. Now up to my upside target of 2827; give it a couple of days.
Happy trading!
Algol
I hope they do not pass the spending bill by late tomorrow or over the weekend. Then your C wave scenario materializes. Otherwise, up up and away. Either way, I am hedged and will make money either way.
Happy trading!
Algol
I am thinking we completed 3 and now in subwave 4. I am looking for a target of subwave 5 up at 2827 or so.
Correction started, correction over! Back up we go! Target for $SPX is 3000.
Happy trading!
Algol
What a bull stretch. So, 2800 for $SPX
Chinese boycott TSY purchases. This could be the beginning of the long waited correction. Then, launch QE infinity by the Fed to continue the bull run for another 10 years... (JK)
Have a prosperous New Year everyone!
Algol
It looks like this 5th subwave will have a low energy and will be time consuming, just as you said, up to about 2700-2703.
Have a happy holiday season everyone!
More fun with EW next year!
Algol
I honestly doubt it. IMHO, there will be one more wave up. My bold call is for a top at 2727, probably by the end of the week.
Believe me, just like you and many others, I would love to go short and ride the big wave down. But, my gut feeling tells me that they will squeeze the shorts one more time before this year is over.
Trade safe everyone!
Algol
And the pullback is almost over!
This is some kind of 4th wave correction (down to 2683?). IMHO, another hard wave up is coming later in the afternoon. I would not be surprised if we run another 47 points or so (up to 2730) before this uptrend is over.