SP500 / ES / SPY - Markets are ready to MELT-UP
This video discusses how the market has been setup for a high probability of a melt-up. In a melt-up the market can jump 15-30% in the matter of weeks. Weeks ago I began positioning my trades for a melt-up scenario which pays off in days like today, but I think this thing could explode much higher. Today's price action sets us up for an opportunity to get long with the overall market structure.
**Market Structure**
-The market has been/is setting up for a melt-up or blow-off top
-An inside bar/fake-out bullish engulfing combo pattern has formed
-Continuous higher lows/higher highs
-Very bullish price action from the current pullback
-Pullback was fairly shallow before huge buying occurred showing the market strength
**Trading Ideas**
-Due to the size of the bar and the shallowness of the pullback, this trade is more of a candidate for pullback entry
-Buy on any weakness that causes a retracement of the bullish engulfing.
-The only overhead resistance is the 2880 all time highs, and the next will be the psychological barrier of 3000
**Trading Tips**
-I will want to be buying on any weakness back to 2800
-The bullish engulfing candle has formed off of key support, in an uptrend, which keeps us on the right side of the market
**Market Structure**
-The market has been/is setting up for a melt-up or blow-off top
-An inside bar/fake-out bullish engulfing combo pattern has formed
-Continuous higher lows/higher highs
-Very bullish price action from the current pullback
-Pullback was fairly shallow before huge buying occurred showing the market strength
**Trading Ideas**
-Due to the size of the bar and the shallowness of the pullback, this trade is more of a candidate for pullback entry
-Buy on any weakness that causes a retracement of the bullish engulfing.
-The only overhead resistance is the 2880 all time highs, and the next will be the psychological barrier of 3000
**Trading Tips**
-I will want to be buying on any weakness back to 2800
-The bullish engulfing candle has formed off of key support, in an uptrend, which keeps us on the right side of the market
Trade active:
Opened a synthetic long split strike position. Short put at 181 and long call at 183. If the trade goes wrong I will see the long call and sell a short call at 181 to turn this into a short straddle/short premium play.
Comment:
typo correction: I will buy back the long call and sell a short call
Comment:
There is upper channel resistance at around 2880 as well as the previous all time high so that will be my price target form closing this synthetic long. The long term plan will be to wait for a drop from 2880 back down to 2800 and then to get long again for what I believe will be the run up to 3000+.
Trade closed manually:
I am cashing out on this trade as price has gotten very close to my price target. I expect a pullback, which if happens, I will be getting long as I expect SP500 to push into the 3000's.
Comment:
Sold naked calls in August weekly to add some negative delta. I think there is price exhaustion and a pullback from here. Ultimately markets continue to new higher highs, but I am going to play a likely pullback right here.
Comment:
Continuing to sell naked calls in the weekly options as price looks to be exhausting a little bit as we reach overhead resistance. A short term pullback may be right around the corner. Once price does pullback I will be aggressively buying again.
