Like I've been saying I still don't really trust this rally and most of NQ's waveforms have looked more like diagonals and zig zags. The current rally is taking shape so far as a 5-3-5 (it's much more apparent in the SPX and crypto) so I don't think it's a given that wave B of the correction has begun.
That said, you have to respect the volume and momentum here. We're coming up into a contested area and I'm expecting some kind of flat to be drawn between the .618 and .382 retraces with the .5 as the locus of control. A convincing break of that Gann channel should signal a continued move upwards toward the 200 day moving average.
For bears falling out of the the .382 retrace would be a bearish signal that this thing is gonna keep searching for a new low and that wave A is still not complete.
The fundamentals are still bad... It reminds me of the rally prior to the pandemic where it's buy now, worry later. I see lots of people saying that the war in Ukraine is nothing and a blip on the global radar, but I think this thing is just getting started. You've got a perceived madman at the helms of the world's #2 producer of oil and nat gas. Energy commodities have a very real and direct relationship to cost of goods which correlates with inflation... which is the number one enemy of the Fed. And the attitude of the Fed RULES ALL in the US stock market. An economic cold war is not going to help what many have already predicted is an oncoming recession. My guess the eventual wave C is when we reckon with the reality of these effects.
BTW watch the 2-10 yield curve... nobody's been talking about it so it's time it rears its ugly head as a catalyst. It's been dropping like a rock for a year.
That said, you have to respect the volume and momentum here. We're coming up into a contested area and I'm expecting some kind of flat to be drawn between the .618 and .382 retraces with the .5 as the locus of control. A convincing break of that Gann channel should signal a continued move upwards toward the 200 day moving average.
For bears falling out of the the .382 retrace would be a bearish signal that this thing is gonna keep searching for a new low and that wave A is still not complete.
The fundamentals are still bad... It reminds me of the rally prior to the pandemic where it's buy now, worry later. I see lots of people saying that the war in Ukraine is nothing and a blip on the global radar, but I think this thing is just getting started. You've got a perceived madman at the helms of the world's #2 producer of oil and nat gas. Energy commodities have a very real and direct relationship to cost of goods which correlates with inflation... which is the number one enemy of the Fed. And the attitude of the Fed RULES ALL in the US stock market. An economic cold war is not going to help what many have already predicted is an oncoming recession. My guess the eventual wave C is when we reckon with the reality of these effects.
BTW watch the 2-10 yield curve... nobody's been talking about it so it's time it rears its ugly head as a catalyst. It's been dropping like a rock for a year.
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Crypto showing significant retrace on war jitters (shocker... that kinda stuff tends to happen when ppl w/ nukes kill each other). Momentum has clearly slowed if not stopped here. Take a look at this overlay of the most recent leg down in the gray box. I've been warning people that we've been drawing diagonals and that these impulse waves are actually 5-3-5... meaning this recent buying is potentially a 3 swing X wave and Y is yet to come.
Buying any retrace of the recent leg up is stepping in front of a car to pick up a quarter... wait for confirmation before going long. I still think the bear's the more profitable trade here.
Buying any retrace of the recent leg up is stepping in front of a car to pick up a quarter... wait for confirmation before going long. I still think the bear's the more profitable trade here.
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That last wave up looked like a 7 swing ending diagonal to me... also bearish that the rally failed to reach the day's high. IMO we're headed back down tomorrow to reach that .382 threshold of this contested area. Futures tomorrow morning before open should tell the story.
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The TIP is nearing the end of this leg up as it meets massive resistance. Expect it to make a .618 retrace to fill the gap left after the Ukraine invasion. Also expecting QQQ to bleed with it.
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Seeing this wave down as diagonal which means it's likely an WXY wave 1 of a larger or just a simple retrace. Will take profits here as we grind down to the .618 retrace and wait for what is likely a powerful WXY wave 2 upwards to reenter short.
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Looking at futures I'm thinking we might actually open gapped down tomorrow... if so, expect a wave 4 retrace which should absolutely be shorted for a powerful wave 5 of W.
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Added puts again this morning. Could be wave 5 here and might overshoot...
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Cool breakout bro.... as expected no demand for shares above the .618 as expected. Bulls didn't even put up a fight and took profits immediately. Expect wave 2 rally for rest of day probably but that's just gonna be scalpers. Back to the bottom of the range we go.
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Looking at the chart again and it actually wouldn't surprise me to see bulls try to push this up to a higher high to complete the wedge. Despite the steep drop I'm not seeing significant enough volume and the SPX only tapped the .618 retrace once during premarket. You'd like to see a double top before it gives up the farm.
I think either overnight or tomorrow morning we paint the top of this ABC. Shorts should wait until after they release the wages report for confirmation that the number's bad, should be enough of a catalyst to send this thing back down. Even if futures tank prior to open, I'm sure it'll make it back most of the way for a furious wave 2.
Looking at the chart again and it actually wouldn't surprise me to see bulls try to push this up to a higher high to complete the wedge. Despite the steep drop I'm not seeing significant enough volume and the SPX only tapped the .618 retrace once during premarket. You'd like to see a double top before it gives up the farm.
I think either overnight or tomorrow morning we paint the top of this ABC. Shorts should wait until after they release the wages report for confirmation that the number's bad, should be enough of a catalyst to send this thing back down. Even if futures tank prior to open, I'm sure it'll make it back most of the way for a furious wave 2.
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Market is clearly prepping for crappy numbers... but like I said, the bull(sharks) are swimming as long as we stay in this area so I wouldn't be surprised to see "not so bad" numbers act as a push to the upside.
QQQ clearly underperfoming SPY now that the TIP us reversing course. Wouldn't chase anything at this point, but as said in the initial post I lean bear here.
QQQ clearly underperfoming SPY now that the TIP us reversing course. Wouldn't chase anything at this point, but as said in the initial post I lean bear here.
Almost forgot to mention the most bearish scenario... where it never reaches the .618 retrace, draws a double top then falls out of the .382 level. Look at the rally that petered out on Jan 12 and witness the ensuing wave 5. Looking at minimum, another 2000pt haircut from these levels in that scenario.
Watch crypto... if it can't make a higher high than friday's close by the time the market opens, this scenario is very much on the table. Also read that retail were buyers in this dip which is never a good sign.