DaddySawbucks
Short

US 30 in Bear Market: Bears don't Bounce!

DJCFD:DJI   Dow Jones Industrial Average Index
Lotta ppl thinking this is gonna repeat Jan 2019. That was a Bull Corrrection. This is a Bear. Bears grind for a Long Time. Median expected ~7-9 months.

CV19 will take ~3-4 months to burn thru US population. April will be the Cruelest Month IMO , tens or even hundreds of thousands of cases.
A Fool's Rally to the 0.50 Fibo around 24K will likely provoke a second bottom.

Geopolitics will take center stage after the viral epidemic abates this summer. ERs will be lousy in Q3 after the viral lockdown, there can be no massive rally.

Tankoff should be mostly over by election day. Trump re-election will spark rally, not because Trump is beloved, but because it will resolve uncertainty.

This isn't advice; trade at your own risk; GLTA!
Trade active: Nibbling on SPXL again under 2400. Maybe too soon, who knows; VIX is lower on 3/18 in spite of -150 -1400 secondary selloff, suggests market setting up for a bear rally. Short squeeze will be fierce if it pops from here, it's a retest of Monday's lows. Big Crapshoot make no mistake but it is filling in the chart fairly well... any positives will bring a massive relief rally IMO. Rolling the bones...
Trade closed: stop reached: Closed longs in open for a push. Pure crapshoot atm; sit on any cash u got left!
Comment: What a happy chart... bounce fail pivot is close IMO. Closed longs too early on 24th, expected that gap to fill... it will ofc, in a week or two...
Comment: Appears to be forming an ABC countertrend move contrary to the primary DT.

This is almost certainly a bull trap and not a true long opportunity IMO, a secondary break is likely to follow and retest the 23 March lows. This may occur in late April/May once the economic extent of COVID damage becomes apparent; or later in year when ERs come back all red. The 0.50 Fibo for an SPX retrace is around 2693. We have strong R around 2636 here. Reaction rallies in bear markets usually do reach the 0.50; less commonly, may attain the 0.62, which would put SPX back to 2937; this seems rather unlikely, given the massive explosion in active cases now. Markets up today on ignorant speculation over vaccine trials. These take years and will not have any impact on the current crisis, lol. Betting on these squeeze rallies is risky and often fruitless, its just whipsaw.

Fibos for Dow are shown in the above chart, bank weakness holds this index relatively lower. 30 stocks is not enough for statistical modeling.

No current position; daily fluctuations wildly unpredictable, waiting on clear signal.
Trade active: Took smallish opening position in 17 April SPY 257.5P, #6 contracts. If Tues push higher, can add for discount. Got strong R at 2630, 0.50 Fib is up at 2690, let's see.
Comment: In 2008 the bounce was 0.382; in 2015 it gave 0.62 back, but rollover at 0.50 in 2016. This one starts to look like a 0.382, the time course is ~ 14-21 calendar days for the relief rally. Secondary selloff likely leads to capitulation and a deeper low.
Trade active: Phenomenal trade on calls lol, again nothin like what I imagined, paid $1 for the damned things and kicked myself all night for paid too much. Today they went for five bucks in the open ffs. Added to the puts and closed them on the fade.

We got an ABC short squeeze rally with divergence in MFI and RSI , lower volume on each successive lift. The rally is doomed IMO.

Puts so damned expensive now really difficult to find a decent position to put on for swing trade. Mostly buy dailies and wait for the break...

Thursday might be worth buying 10c dailies to see if we get a break Monday.
Comment: Buying SQQQ for a hair over $16. 52-week low is 15.89, lol, this thing does get decay and you can see it, after a month with QQQ -20%, the ETF is just barely holding February price, but it traded for $48 on 23 March. We gonna get another slam-down soon so this is a simple strategy. Don't hold this thing long-term, just a week or two at most, else decay will eat you alive. It's a futures ETF, lol.

IMO these ETFs trade like LEAPS options, and may even cost less now, lol.
Trade active: Yeah its s Bear Candle, a red shooting star. Next stop: See chart; Sell it all FFS!!!
Comment: Holding on to my SQQQ, short 5x $19 April calls. Looking to be called away or roll out.

Although it seems unlikely, a short squeeze could push indexes to the 0.62 Fibo before rollover.
Trade active: Entered SPXS position in the close; Perfect double top with short squeeze EOD and futurez tank in AH
Comment: Correction to Fib levels in above chart BTW; 0.50 Fibo for drop from 29.6k > 18.2K is 23880. Hit 23617 on 4/07. Rejection at same level, slightly lower high on 4/8.
If no higher high on 4/9 to 4/14, then Rollover is imminent IMO.

After second bottom, expect a massive 5-wave impulsive rally up to the 0.618 or even 0.786 levels for the full drop. Then another rollover... look at behavior after the drops in 2018 (both Feb and Nov > Dec; IMO the 2020 low has yet to be found.
Trade active: Yeah we got a double topping formation on 4/14 back to press 24K. DJI getting terrific resistance at this 0.50 Fibo price, NAS has a .62 retracement already.

IMO we may be topping out right here on 4/14; beware the Ides of April?!

Entered shorts in SQQQ, SPXS, TECS. TECS is cheap; way less than monthly puts, lol.
Trade closed manually: IMO the bullish action in FAANGs with NFLX at ATH on 4/15 suggests move higher soon likely reach the 0.62 Fibo. Closed shorts, gone into cash; wait and see.
Retail numbers were lousy but this was expected and they will surely improve by Q3 when this plague passes over the summer.
The trend is up atm and useless to fight it. Pattern is sell for a day, then buy, buy, buy.
Trade active: Re-entry on teh bear flag near tip IMO; I see an H&S in the weekly. I shorted it in QQQ May 210P EOD.
Comment: Holding shorts; double topping at resistance on enthusiasm over a drug which is statistically as effective as placebo:
https://www.marketwatch.com/story/why-an...
Trade closed: stop reached: Closed shorts for a push as it looks like we're going to the 0.62 Fibo on SPY.
Expect another EOD short squeeze.
Holding nothing over weekend; GL!

Comments

Are you charting elliot 5 waves?
+1 Reply
@bakkah, Yeah imo it's in the 5th atm; panic extension
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@aox8zs, It is not 1929. Everyone and his brother wants to draw this chart. We gonna have a bear but it is not a Great Depression.
People are not in soup lines on the street. The viral syndrome will pass and has certainly done some damage but this will recover.

I expect this Bear to last ~7-9 months, the median bear for SandP. If we enter a more severe recession it will persist into 2021.
The current bull flag is almost certainly an ABC countertrend to the primary downtrend, which is not over IMO.
Lower low can occur later this Spring, or maybe in the Fall, creating a terrific accumulation phase.

Great buy opportunities in the year ahead and another massive bull leg to follow into the 2020s IMO; the ultimate short squeeze.
Reply
aox8zs DaddySawbucks
Reply
@aox8zs, Yeah we know this week is the peak; markets will recover before epidemic is over, but the economic fallout will produce double bottom IMO.
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Comment removed.
aox8zs DaddySawbucks
@DaddySawbucks, In 2008 the bounce was 0.382; in 2015 it gave 0.62 back, but rollover at 0.50 in 2016. This one starts to look like a 0.382, the time course is ~ 14-21 calendar days for the relief rally. Secondary selloff likely leads to capitulation and a deeper low.
Reply
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