Short

Could this be a big bat pattern?

SPX went parabolic after breaking the 1.61 of the bottoming swing. This move has now extended to the 2.61 of that fib set and currently sold off to under it.

It's possible this is a bat pattern. If it is, then we probably made a high yesterday. One caveat of the bat to always keep in mind is if it fails it can evolve into a crab and when that happens you are essentially "Right" but you're going to get spiked out. Always a risk to keep in mind when trading a bat.

We have a similar pattern in the DJI. Interestingly, we have not made as deep retracements in the RUT and Nasdaq. Nasdaq actually looking much like a classic bull trap. The possible Nasdaq bull trap and bat patterns in DJI and SPX resulted in me opening swing shorts in DJI, SPX and Nasdaq yesterday.

Waiting to see if we can make the follow through break today. Will trail stops and add to positions if we do.

Note

Selling should start soon if the bat is going to work.

Note

I see some selling.

Note

Did a lot of positioning for the risk off drop while we were close to the highs. Took a few stop outs on the run up and built a position during the time the market ranged.

Reversed about 10 points before my big stop on SPX. All positions up big now. Have shorts in all the indices (Only small positions in DJI. Stop hunts were rough there). Accumulated a bunch of crypto shorts into the high of the last rally. Have a tonne of COIN puts which has by far proven to be the best of the trades.

We're now getting into my first big target level for the bear swing. I think ultimately we're heading lower but it is possible we retest 5600 first.

My plan for now is to take profit on my shorter dated puts (All opened OTM and now deep ITM). Hold my end of month puts (Betting on us closing the month low) and inside of a narrow zone look for spots to enter targeting 5600 with 10 - 20 points risk.

This way I'll bank all my shorter term profits before they risk going bad. If we rally I should make a bit in the rally and at the very least have enough on to offset the drawdown of my swing positions back to even.

And if we happen to make the run away break - I did all the hard work for that last month and this will just be the time to sit back and let the market make me money.

Would very much prefer a bounce now, though, short starting to feel too easy. Would like to see some arrows in the bears backs to load up again.

Just a little over 5600 would be ideal. We'll see what happens if and when we trade 5360.

holeyprofit

We have signals services starting from only $10.
Find them here: holeyprofitnewsletter.substack.com/p/all-holeyprofit-newsletters

Find 15 free strategies here: holeyprofitnewsletter.substack.com/p/strategies-parent-thread

Also on:

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.

holeyprofit

Also on: