This will squeeze all of the mothers of bears if this plays out.
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Right now we have a bear divergence. Expect a pull back to trap.
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As long as RSI is above 40
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ES has nice setup for continuation. There is a hidden divergence I found.
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So far this still plays out. Retraced 0.618. I entered at $3674. Stop loss at $3625.
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We got a problem. This might be a Leading Diagonal. Not sure if this will be ABC or 12345. If we take out $3625, this will be super bearish.
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For bear case, looks like bears win. If this continues to $3520, we are going to short at $3800 to $2200. This is going to be it.
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If SPY couldn't hold $360, I expect it would bounce it at $350 and reject at $410 in middle of November. $400 is is 0.618 of the retracement. We can short there. This is my plan I would like to share.
haha you went from bear squeeze to bear supporter. you need more vision.
thienlovv
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@kennethloy, haha I know. Please show me if you got any idea.
kennethloy
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@thienlovv, any rally now is temporary and short lived especially when we are not in a normal trading year. On the 1 hour timeframe on BBand 100,2 (it’s at the lower band and indicate oversold), rebound is on the card but again, I’m more inclined to it going back to the previous LOW and see if bulls are coming in. We should see it go down to 3199 at least.
thienlovv
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@kennethloy, sounds like you are very confident. We just touched the weekly MA200 but didn't break it yet but you assumed it's going straight to $3199. Hope you are right.
kennethloy
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@thienlovv, definitely not going straight to 3199. As I mentioned, rebound is on the card. Any relief rally will be gateway for a larger crash. 3700 could be on the card, if not we go down to 3570. Take a closer look, there are no visible bull support anywhere near.
thienlovv
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@kennethloy, that sounds better. My original thesis was bear squeeze after 200 points up. It's got potential to squeeze. If SPY reaches $350 or ES has another leg down. I'm 100% on bear side.
kennethloy
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@thienlovv, indeed there was a high chance of short squeeze to the upside where you can see 5pm 6pm 7pm the consolidation and then 8.30pm whatever news out there are bad news and trigger a meltdown breaking that 3720 strong support bull has. My personal opinion, mon-wed sideways slight rally, thurs CPI data another crash.
thienlovv
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@kennethloy, On Oct 4, I said there was bearish divergence. I thought that I could see some correction and need to hold above $3660-$3720 and RSI above 40 to be bullish. Last Friday, it broke all that so it broke my plan. And I agree what you said that we see some bounce and short live down to $3520.
I wanted to create another post but I wanted to stick around to discuss until it's officially $3520.
oliverrathbun
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I think you should consider the overall structure of the 30 minute from the 10/2 low to today's low. Does it look and qualify as a wave 1&2? I think it does.
Look at the channel here. Notice the angle of the lines connecting the highs on Oct 4 & 5 and the angle of the lines connecting Oct 2 & todays low.. perfect. If today's low happens ANYWHERE else the angles at the top and bottom don't match up.
Now look what happens when you add the Fibs in... the market corrects and oscillates around the respective fibs in the channel. I call this an organic channel. To me it validates the structure as an impulsive move up with a natural corrective process that follows.
What's this all mean? Nothing at this point until there's confirmation. I use this as a way to validate these structures....when you asked if I use fibs. This my primary use of fibs...within the context of geometry. This works on both higher and lower timeframes.
thienlovv
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@oliverrathbun, thanks for sharing Oliver. On last Sunday I was super excited when I saw 12345 and it looks impulsive to Oct 6. The channel on your chart perfectly lined up. I'm not sure about the count today because I saw a leading diagonal. I'm not sure if this is ABC or 12345. On Monday we need to get back above $3666 or else are going lower. Gotta have a backup plan if it goes lower.