IRM - Major Top Completing 🐰
IRM looks set for a major collapse here having struck a major long term fib and falling out an ending diagonal to form what is probably LPSY. RSI divergence also confirming top.
This will easily see 200 and 500DMA but I think it will go much further and will hold short positions.
Not advice.
This will easily see 200 and 500DMA but I think it will go much further and will hold short positions.
Not advice.
Comment:
SPX opened bearish, IRM gapped down.😄
Comment:
Big nothing-burger happening here for IRM I think - having a large bounce but with SPX overlaid; can see it is simply moving with the market.
It may get all the way back to that 1.618 fib, but really doesn't matter because trends are about momentum and stability. That 7% gap down into the close was the impulsive move and now dictates the trend This bounce here is all quite corrective.
Also that gap that I suggested will happen before it happened was large players, smart money perhaps even - exiting in large amounts out of hours.
As soon as SPX runs out of gas this should resume the now dominant trend to the downside.
It may get all the way back to that 1.618 fib, but really doesn't matter because trends are about momentum and stability. That 7% gap down into the close was the impulsive move and now dictates the trend This bounce here is all quite corrective.
Also that gap that I suggested will happen before it happened was large players, smart money perhaps even - exiting in large amounts out of hours.
As soon as SPX runs out of gas this should resume the now dominant trend to the downside.
Comment:
This trade is now similar to PFE that had another wave up and in hindsight I think the RSI was a bit too low. In the end it won't make a difference as I have LEAP puts with low IV and I'm fairly sure that long term 1.618 will prove to be the long term phi related pivot.
This last wave up is now overbought on the daily and has hit the 1:0.618 so good chance it will fall soon, also with indexes probably topping soon. But not impossible that it will get up to the 1:1 @59 and strike the upper trendline again. This seems less likely but we'll see.
Either way its only lost opportunity cost as a big crash is coming and should easily land well in the money.
This last wave up is now overbought on the daily and has hit the 1:0.618 so good chance it will fall soon, also with indexes probably topping soon. But not impossible that it will get up to the 1:1 @59 and strike the upper trendline again. This seems less likely but we'll see.
Either way its only lost opportunity cost as a big crash is coming and should easily land well in the money.
Comment:
Lesson learned with this one is perhaps to have the patience and to expect a final touch of an expanding topping pattern that even may appear to be breaking down.
Indexes are all at their potential reversal points and looking at the chart you can see this move has been running very much in tandem with SPX overlaid. But the difference is IRM has moved on to a higher high while SPX is potentially at a lower high.
However it may take some time for SPX to reverse if it drifts in distribution and in that time IRM can potentially complete a blow off top and move even higher, but its also very possible that selling pressure at the upper trendline will see a reversal.
If SPX does drift in distribution and IRM push on above the trend channel then it will be very overextended I think.
Also looking to RSI I think it may go overbought again I think which would be in favour of hitting the 1:1.
As I said it could break down here but since I have an entry already I'll be more patient. If it does break here then my previous entry is a good one though slightly early and it wont matter too much since I bought a 2024 LEAP put and with this all happening so fast there is plenty of time. Also it is bought with low implied volatility (IV). When the dominant trend really does switch to the downside IV will increase and so will the option price.
I will add a second and last LEAP put around the 1:1 fib but I think if it gets there good chance it will overshoot a bit so I'll be looking to enter another LEAP put at $60
Indexes are all at their potential reversal points and looking at the chart you can see this move has been running very much in tandem with SPX overlaid. But the difference is IRM has moved on to a higher high while SPX is potentially at a lower high.
However it may take some time for SPX to reverse if it drifts in distribution and in that time IRM can potentially complete a blow off top and move even higher, but its also very possible that selling pressure at the upper trendline will see a reversal.
If SPX does drift in distribution and IRM push on above the trend channel then it will be very overextended I think.
Also looking to RSI I think it may go overbought again I think which would be in favour of hitting the 1:1.
As I said it could break down here but since I have an entry already I'll be more patient. If it does break here then my previous entry is a good one though slightly early and it wont matter too much since I bought a 2024 LEAP put and with this all happening so fast there is plenty of time. Also it is bought with low implied volatility (IV). When the dominant trend really does switch to the downside IV will increase and so will the option price.
I will add a second and last LEAP put around the 1:1 fib but I think if it gets there good chance it will overshoot a bit so I'll be looking to enter another LEAP put at $60
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Dividends on Monday - if SPX opens bearish I would not be surprised if this gaps down.