Options Wonderland

[Fox13]

The Rule of 4 applied to RUT, in its Dynamic Form. Here, the 4 contact points are on a curved line. The problem is that the 4th kiss can be often a “fake overshooting” and it’s hard to interpret it correctly. At a first glance, it seems that since the index closed at 649.52, above the EMA value used as reference (646. 65), the long term uptrend was saved…at least for a while. But is this true? Some additional observations, on intraday charts, might be helpful. They will be further presented.



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RUT1 min chart: Only the RAMPO of the last 6 minutes “saved” RUT. In the 655 area there is a recent double top. This level should become the site of a triple top or of a “rule of 4 “in action. However a brutal gap up above it on Monday could negate the meaning of this level. LOL! Such a gap is actually quite probable since on Monday the market will be closed in several European Countries, the “chancellorette” will not miss the opportunity to shut up today and the HSI, which was closed on Friday, might want to catch up with the Yankees. What a chance for DA BOYZ! They can push it up another notch!



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RUT 5 min suggests a zone of resistance (656.25 - 656.41)…unless an overnight gap above it takes care of that confluence. As a simple curiosity, one might also notice how the amplitude of the Opening Range (30 min) progressively increased during the latest 4 days.



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RUT 15 min: The gyration, recently engineered, generated a zone of congestion , which, in turn, brought the EMD to a “cycle mode”. Again, but this time for different reasons, an escape North of 656.25 should be meaningful.




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RUT 130 min: The LRC (green) has been adjusted to predict a “swinging breakout” inside the +/- 1 SD Regression Channel. Not yet…but very close….