DaddySawbucks

SPX OVernight Top in Place? Lower before Higher; Correction Inc!

Short
CME_MINI:ESZ2019   E-MINI S&P 500 FUTURES (DEC 2019)
Chart says all. Been shorting too soon as usual, but the 7-wave Triple combo is a rare and confusing pattern.

Overnight ES futurez tapped the intersection of long-term TL and near-term TL in this wedge ; they converged at 3056.

China says they were just kidding and wont get serious with the Great Donald, such a big surprise!

Expect to fill the gaps from past weeks, get support around 295 on SPY and bulls may try again for the 9th wave.

A real Bearish Correction can start anytime; but seasonally Feb-March would be a likely scenario with trade and election worries looming.

On Wednesday 60% of trading was selling, only 40% buying to reach new ATH ; RUT and DJT diverged, Transports just got killed; these are leading indicators.

Broader market is not in step with the indexes, which advance on progressively smaller volume and fewer issues with each successive bull wave.

VIX is sub-13 again and in a compressing wedge , expect a big pop in volatility very soon! Play the VIX with UVXY calls if you dare!

This is an idea and does not in any way constitute investment advice- trade at your own risk! GLTA!
Trade active: Opened positions w/10 ITM Put contracts each in:

DIA 29 Nov 272.5 spread v 01 Nov 269;

IWM 157 spread v 01 Nov 154.5;

SPY Dec 305 v 01 Nov 302.5;

QQQ Dec 200 v 01 Nov 196.5;

UVXY Nov 19.5 Calls, trading at 19.4 with VIX @12.90.

GLTA!
Comment: LOL moving fast had to roll the QQQ shorts down to 195.5 strike; if it moves under 196 roll to next series!
Comment: Forced to roll the SPY 302.5P out and down to Monday 04 Nov 301s for .17c debit;

And moved the IWM 154.5s to 154 on 01 Nov series for .13c. Still net credit!
Comment: Adding 5 contracts to each position on any small lift here...
Trade active: Rolled the DIA 269s down to 268 for .21c, still in credit balance; next roll to the Nov 8 Series if shorts get near the money. Long puts are growing terrifically!
Comment: Moving so fast now had to roll all the short legs out to 8 Nov strikes for a net credit- never need to lose a penny on the short legs!
Comment: I rollled the strikes out in a 2:3 spread selling 10 to cover 15; now shorting the 01 Nov OTM dailies again on the remaining 5 contracts in each position. Will add Friday if R/R favors. Hold the long term contracts and trade the weekly shorts.
Comment: I added 5 more contracts to each position on the 01 Nov spreads. Now got 20 each and bought 30 calls on UVXY, the Nov 19.5s for average of 1.30. If it tanks these will be $10.

See if I have to roll shorts again by Friday; I like to take advantage of the expirations, these things are 50c today and may be 5c tomorrow, unless they go ITM.
Trade active: Yeah didn't get to Friday lol rolled all short legs down $2 and out a week to 8 Nov series. We got a bear engulfing Doji going down here... helluva signal IMO!
Trade active: Yeah look at the VIX breaking out now nearly $14... UVXY calls gone nuts!

Last time VIX jumped the UVXY went to $30 and the calls were 10-bangers.
Comment: Now in the happy condition that all legs are green; showing gains in both long and short legs of these bear spreads. Holding UVXY calls for the fireworks- hope it doesn't disappoint! It is possible to short OTM calls against these by creating bull spreads, but typically then you gotta scramble to cover the damned things!
Comment: Pared partial position on the day for risk-off; a fair chance that Friday could give a dead cat bounce. Can always add more! Against my better judgment to take advantage of the Friday expiration I shorted 20 UVXY 20.5 calls and left 10 open.
Comment: Shorted 10 more UVXY 20.5 calls exp Friday. Net .27c, it has fluctuated between 19.5-20.1 today. Unless we get a selloff Friday these will expire worthless.
Comment: Day pattern forms a descending triangle (not a wedge- this has a flat base); these break down. My shorts constitute 10% of the long position value. I took half pos out of QQQ, DIA and SPY, keeping 10 spreads each; these have been bullish and stand a fair chance of bounce. Holding on to IWM with 20 spreads. Created 30 bull spreads on UVXY. IMO the real selling will start next week, if it doesn't bounce, distribution will kickoff. Let's see the close!
Comment: Looking back at past weeks I see a potential H&S forming if the 15 Oct peak was a left shoulder and 30 Oct the head we could get a right shoulder in week after next. Could even bull to a three drives formation; still could bull, do not be overconfident.
Trade active: Closed half the IWM pos to preserve gains and riskoff. IMO can get shortcovering EOD and drive these up a bit. Add again Friday if it does.
Comment: Jobs report Friday: https://www.marketwatch.com/story/us-oct...
Trade closed manually: Closed on the retest of day's low. On close re-inspection price appears to be forming a bull flag- a descending wedge, which these break up; and vix falls when prices drop, suggesting a rally may form.

I always short too soon and hate to lose! Short the rally!
Comment: Yep - l@@k QQQ back near 197 it's gonna bull IMO. Short covering headed for the exits- well off LOTD now! So very chancy now for any position- historically after a triple rate cut markets rise 5-10% but this comes at ATH already- who knows?

If it runs to 3300 shorts will look pretty silly. Buying calls at this price is even scarier- BOO!

Happy Halloween!
Trade active: Took a small pos in UVXY just 400 shares shorted Fri 20.5 calls net debit 19.60. This is near historic lows and it won't expire. A covered write, let's see. VIX has been crushed but can always get more ground down.
Comment: Back over 27K and 3030- short covering EOD.
Comment: See my related post on VIX. Could get crushed by Santa rally. Will it bull?!
Trade active: Re-entered positions on four major indices at 3056. Trades at TL convergence!

10 contracts each in Jan $5 bear spreads in SPY 310P, IWM160P, DIA 275P, QQQ 200P.

Shorted 8 Nov weeklies. GLTA!
Trade active: Also buying UVXY 3x ETF on VIX now trading near 1-year low! Pop soon- R/R favors.
Comment: Added a few more contracts to each side at 3063. Now in 12 each DIA and SPY, 13 each QQQ and IWM bear spreads. I shorted puts on UVXY to be put to me at $18.
Trade active: Increased all positions to 15 spreads each and rolled up a few weeklies. Add more if and when VIX gets under 12. SPX trades right at 1.272 Fibo.
Comment: VIX squeezed down to 12.3. Short weeklies went in half or less; took the daily gains and rolled em up in case it gaps again Monday. If not, is easy to roll back down.

SPX high on day and closed at ATH of 3066.95; EOD exactly on the 1.272 Fibo.
Comment: It is bullish as all get-out. Dammit! Be honest, who bought calls for this?! Bah, another miss- That said, at current price is overbought and a technical pullback to close the gaps is quite likely by mid-November.

The previous up wave lasted 3 weeks; we are now entering week 4 of the second leg up; IMO we are in a Three Drives pattern, on the peak of Second Drive.

Gaps up began at 2949; on chart the intersection of lower TL at 2950 occurs around 11-18 Nov. If we get the TL retest it will be a terrific buy opportunity!

A dip to that price would provide the bullish potential energy needed for the whole world to BTFD and pile on for the big push to ultimate high price in Dec/Jan. Let's see! I am short atm for better or worse... aiaiai!
Trade active: Loaded up on UVXY, bought Nov 27 Wednesday exp VIX calls strike $15; added to index positions now in 20 each bear spreads on SPY/QQQ/DIA/IWM. I noted the QQQ and SPY short puts melted into pennies over weekend, so I rolled them up and out for realized nice gain; but the IWM contracts only sagged a bit and the Russell did not move much today. IMO it is topped.

Also NB: VIX actually opened HIGHER than Fri close from 12.30 > 12.44 and since rose to >13 again. This is a bear signal; IMO it is headed for a vol spike real soon. Based on wedge in VIX chart the next spike will be smaller than the ones in Sep and Oct, might get up around 18-19, then FOMO Fools will rush in to BTFD.
Trade active: See more recent posts for updates. This weekly chart gives nice perspective; after six weeks up, its normal and expecgted to get 2-3 weeks down, we just started IMO. This minor downtrend will be brief and shallow IMO. There is another leg up left in this monster! Been adding UVXY and CVIX calls. Flipped puts several times, back in DIA 280P, SPY 310P, QQQ 202P, IWM 160P, all 31 Dec contracts.

The exchange offers 31 Dec expiration for tax reasons. It is a Tuesday; but any option carried to the New Year will be taxed at the closing price on 31 Dec for capital gains; if it subsequently declines, you have to still pay tax on the lost 'profits,' which you might never realize... an odious and absurd rule.