SPDR S&P 500 (SPY)

[Fox13]

OK Be, I am out of what turned out to be an uninspired short trade. The fractal rez. Around 135, 6 was obtained by extending a horizontal line from a peak described by the fast (purple) FRAMA (drawn by modifying the Elhers formula). When the price touched this line and then started to go down , I bought SPY puts immediately. After that, it coiled a lot. It tuned out that some “people” were buying some kind of futures (E-Minies), The first big arch marking the increase in vol. could be called : “Enters the DRAGON”. The second one , much smaller , is the suckers’ rally, who found out from Pisani, on CNBC, that the dragon was there. I tried my best to get out. An opportunity appeared, when, after the Fed’s Minutes, in the general state of tra-la-la, the price touched the famous 34 MA, which is so popular here. Probably the price will reenter the channel and go lower, or break out higher, but I decided it’s not worth risking it.
Ralph N Elliot discovered in the 1930-s, that the time/price evolution of stock markets is a “specifically patterned fractal”. In the meantime fractals became very popular( figures which include each other in essence but not in details, like a theme in a musical tune which can be discerned in spite of being heard together with ”fiorituri“). Seacoasts on maps at various scales are also fractals. Robert Prechter has studied the quantitative expressions of the market fractal and described it as a ROBUST fractal. He and others wrote books and articles which I personally enjoyed. A fractal moving average is not the same as a linear or exponential moving average. As one can notice, it is moving more dramatically than the price action when the price moves, and is lazy or flat when the price coils. I work with two fractals: the fast one which moves a lot (purple) and the slow ( or lazy) one (in white). I noticed that their peaks, V-bottoms , extensive horizontal flats, or bowtie formations can have a predictive value for the future evolution of the price action. There are many programs and books about fractal analysis and strategy. Various people and broker-dealers sell them, but I cannot recommend any since I am only a free and wild mountain fox. Regards.