Bull flag waving... the white flag; top of the channel
Yeah thanks Fed. ECB next on the grill. Look for fairly sharp pullback to DIA 247 area, where strong support reaching back intersects the old downtrend. Dunno if the flag will keep waving or another bad break could come up- very dicey now. This is the end of Elliott wave V (leg 3).
In My Humble Op, with 4 hikes looking at Fed funds rate near 3% >>> that's the breakpoint where bonds look better than stocks. Dow Transports still look healthy but the financial sector is weak, suggesting end of the bull and recession around the next corner. Flag might fly for a month or more after pullback but...
New Chairman Powell wants to make name for himself - he ain't no Paul Volcker nor Alan Greenspan. Fed's gonna burst the bubble and start a secular bear market with 20-30% correction. Will be real exciting in Sep after the next hike- God forbid they hike 50 basis pts. Don't the most exciting crashes usually arrive in October?! LOL...
Well it was a nice bull while it lasted; Hey Jerry, let's take him out back to the woodpile and put it down, shall we?
In My Humble Op, with 4 hikes looking at Fed funds rate near 3% >>> that's the breakpoint where bonds look better than stocks. Dow Transports still look healthy but the financial sector is weak, suggesting end of the bull and recession around the next corner. Flag might fly for a month or more after pullback but...
New Chairman Powell wants to make name for himself - he ain't no Paul Volcker nor Alan Greenspan. Fed's gonna burst the bubble and start a secular bear market with 20-30% correction. Will be real exciting in Sep after the next hike- God forbid they hike 50 basis pts. Don't the most exciting crashes usually arrive in October?! LOL...
Well it was a nice bull while it lasted; Hey Jerry, let's take him out back to the woodpile and put it down, shall we?
Trade active:
Shorted 061418 @DJIA 25330. Was top of a shooting star Doji, but who knew at the time? Just a lucky guess.
Argument with self before the plunge: "I've seen this level tested three times now... strong resistance at 25400 on Monday- may have been the near-term top.
Buyer DIA July puts strike 255 sold for 4.25 today now asking 5.25 will only get more expensive. The VIX was so low there was small time value premium as the whole market is speculating on calls now. Don't be a lemming!
Buy in the money contracts if you play this way; they mark points near $ for $ with their index. The premium on out of moneys kills you. Time is everything in contract trading- give yourself enough. Look for decline before end June.
Looking for retrace to ~24668 Fibo support could see a hammer spike Doji in that area to carry as low as 24480 but don't count on it. Tremendous Divergence in the indices: huge bubble in the NDX; it's like tulip bulb frenzy feeding, but the mainstream market is already in decline, blue chips selling lower every day now. Won't be long...
Argument with self before the plunge: "I've seen this level tested three times now... strong resistance at 25400 on Monday- may have been the near-term top.
Buyer DIA July puts strike 255 sold for 4.25 today now asking 5.25 will only get more expensive. The VIX was so low there was small time value premium as the whole market is speculating on calls now. Don't be a lemming!
Buy in the money contracts if you play this way; they mark points near $ for $ with their index. The premium on out of moneys kills you. Time is everything in contract trading- give yourself enough. Look for decline before end June.
Looking for retrace to ~24668 Fibo support could see a hammer spike Doji in that area to carry as low as 24480 but don't count on it. Tremendous Divergence in the indices: huge bubble in the NDX; it's like tulip bulb frenzy feeding, but the mainstream market is already in decline, blue chips selling lower every day now. Won't be long...
