US Equities Alternative Bullish Hypothesis: In Primary EW 3?!
Updated
Risk is terrific for both longs and shorts at this juncture; I am sidelined, patiently and prudently waiting.
In a previous idea I hypothesized a double bottom possibly in October. It is possible the markets are grinding out a near-term bottom at this consolidation zone now.
Markets hold tenaciously to this consolidation zone beneath ATH. The September pullback may be nothing more than an Intermediate wave 2 in a Primary Wave 3. We are near a Fibo retracement level off the Cup which seems to be supported, although support is illusionary and can break sharply and suddenly, making longs as risky as shorts.
Shorting is terrifically risky now, as delegates are in trade talks in China atm, as a single optimistic tweet could unleash coiled up Bullish energy at this level, possibly driving prices to new ATH in Nov/Dec and another mad January rally into a Primary Wave 5. Donald manipulates the financial markets, and he clearly needs it to be propped up to support his re-election campaign. Betting against the Donald has historically proven to be a poor risk.
Direction is highly uncertain at this point; it could break either way, but we saw in August after intense distribution the prices broke to upside. It is certainly possible the Bears have been ground out and equities are poised to move higher. October actually tends to be one of the more Bullish months on average, although most notable crashes and many corrections also have occurred at this time of year, giving it an undeserved bad rep; it is by no means a certain bet to expect another, after last year's savagery.
We do have a Cup and Handle clearly formed, and if this be truly the Handle, then the next move is continuation to upside, as depicted in this graph:
investopedia.com/terms/c/cupandhandle.asp
I offer this idea as a precautionary tale to plungers; please FGS do not bet the farm on a further correction! I closed shorts today, as a massive rally could continue.
Any disappointment in global events will spark a selloff but optimism over trade could as easily drive prices to a new ATH. R/R is terrible now!
As always, this hypothesis is just another WAG, definitely NOT investment advice; trade at your own risk; GLTA!
In a previous idea I hypothesized a double bottom possibly in October. It is possible the markets are grinding out a near-term bottom at this consolidation zone now.
Markets hold tenaciously to this consolidation zone beneath ATH. The September pullback may be nothing more than an Intermediate wave 2 in a Primary Wave 3. We are near a Fibo retracement level off the Cup which seems to be supported, although support is illusionary and can break sharply and suddenly, making longs as risky as shorts.
Shorting is terrifically risky now, as delegates are in trade talks in China atm, as a single optimistic tweet could unleash coiled up Bullish energy at this level, possibly driving prices to new ATH in Nov/Dec and another mad January rally into a Primary Wave 5. Donald manipulates the financial markets, and he clearly needs it to be propped up to support his re-election campaign. Betting against the Donald has historically proven to be a poor risk.
Direction is highly uncertain at this point; it could break either way, but we saw in August after intense distribution the prices broke to upside. It is certainly possible the Bears have been ground out and equities are poised to move higher. October actually tends to be one of the more Bullish months on average, although most notable crashes and many corrections also have occurred at this time of year, giving it an undeserved bad rep; it is by no means a certain bet to expect another, after last year's savagery.
We do have a Cup and Handle clearly formed, and if this be truly the Handle, then the next move is continuation to upside, as depicted in this graph:
investopedia.com/terms/c/cupandhandle.asp
I offer this idea as a precautionary tale to plungers; please FGS do not bet the farm on a further correction! I closed shorts today, as a massive rally could continue.
Any disappointment in global events will spark a selloff but optimism over trade could as easily drive prices to a new ATH. R/R is terrible now!
As always, this hypothesis is just another WAG, definitely NOT investment advice; trade at your own risk; GLTA!
Note
We got an intraday double bottom with a higher low in PM; this day might turn out to be a hammer, too soon to tell but it starts to look Bullish IMO. Not at all comfortable shorting this now!Note
We got inverted H&S over past week on 5-day chart. Headed higher IMO.Note
Seems to be in trouble now... let's see if it bounces.Trade active
IMO this idea is valid, however the path to ATH will be fraught with hazards:A Harmonic Butterfly pattern is evolving. This is a more powerful and compelling formation than Cup/Handle or H&S, which are more likely to be spurious. See my latest post; pattern projects Dow 24,224 by 29 October with subsequent rally to 27,716 by EOY. GLTA!
Trade active
See my related posts on the harmonic BUlish Butterfly nd ABC correction ongoing. Not yet clear how deep and broad the correction will form. First support just under 26k. Next support at 25k and a likely bounce point. Final support at 24242.
Watch closely! Wait patiently!
Trade active
FYI folks closed the position waiting for re-entry. Any gap down stands chance of getting filled and this was a big one, driven by 'trade fears' and global 'fake news', most of which is prepetrated by THe Donald. SO, likley to get at least some retracement. I bought some AMD & GE in covered calls while we wait. Not ready to buy calls just yet but it was time to clos out some puts for ~30% gains. Not bad for a day's work!See my related post on Harmonic Theory. Still not sure if that will pan out or whether we get bounce off the lower TL back into triangle. It is still a Bull Market for the time being and I still expect higher prices EOY, but it's gonna be a rocky road IMO. Very chancy here!
Trade active
I bought a long term LEAPS gambit; 5 Jan 295Call spread against Fridays' 292s. Net debit only 5.70; sell weeklies for three months and it becomes a cash generator!Trade closed manually
See my related ideas for continuation. IMO this will be a failed push and reject at another double-double top (is rejecting now in PM Friday trade); looks like R for DOw at 27k, for SPX near 3k now. Bought 80 puts on QQQ/IWM/DIA/SPY in late trade;Added in post - market to all four positions now holding 25 each Nov puts on above indices, 100 ITM puts on position; these moved so fast I was forced to roll the short weeklies out to next series and down $3 so these are now $7 Bear Spreads. Have a great weekend all!
Note
Not behaving as expected. Seems like a push to retest ATH in progress. R/R lousy again; take what the market gives and be cautious:Seems like bullish undertone persists. Advancers > Decliners; breadth firms up; IMO this beast wants to retest the ATH. Useless to hold shorts while it does this; but too risky to bet that it will. Sidelined again; stop lossed. Look for blowoff rally to re-enter. R/R poor again until we get a clear signal IMO.
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