Irrational Exuberance! Bad news is good, good news is gooder!
The gaps tell all. Measured move from the runaway gap ought to end up around 388 +/- 2 pips.
There must be and certainly will be a pullback from a last exhaustion gap, may gap up sometime 1-3 Nov.
Fed minutes on 3 Nov may be catalyst for pullback. Likely pivots shown, 1/3 speedline most likely, given extreme fearless bullishness.
Can bull anywhere anytime from pullback to any of the levels shown. Not even attempting to guess where this might occur, get ready!
Final ATH TBD, might come in Dec for Santa Rally IMO. Would be a 5th of V EW, a monster. The subsequent break in 2022 will be spectacular...
Not advice, just A TOOLUSE TUTORIAL... REMEMBER THE TREND IS UR FRIEND TILL THE END AT THE BEND! GLTA!!
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I strongly encourage read & review John Murphy Technical Analysis of the Financial Markets. It's a freakin' bible IMO. You should review ALL of chapter 4; with especial attention to "Reversal Days" (p. 90), Gann & Fibo Fan lines; Speedline retracements; and the Three Types of Price Gaps including their characteristics:
It is here written; "Breakaway gaps more often than not are not filled; prices may return to the upper end of gap, and may even close a portion of the gap, but some portion of the gap is often left unfilled."
NB: 14 October gapped up 40 pips, slightly pulled back and then went parabolic.
Measured, aka runaway gaps, sometimes go unfilled, but often act as support and remain open, whereas "after breakaway and runaway gaps have been identified, the analyst should expect the exhaustion gap... which will quickly fade and prices turn lower within days... it is a dead giveaway... the exhaustion gap has very bearish implications."
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We had runaway gaps on the 15th and 19th October; a smaller gap on the 20th was filled, then price moved higher into consolidation zone, and gain broke above in irrational defiance of negative ERs from big Tech and a crushing report of stagflationary growth at 2%...
IMO a final gap up is to be expected. Should appear bewteen 1-3 November. Would not get real big short until you see it IMO.
Price by itself is never a good reason to short, price can always increase illogically and irrationally. Short on signals, those we get from indicators and chart patterns. I never short anymore off Elliotts waves, these are so subjective, they only look clear in hindsight. Right now we got a pretty clear 5-motive impulsive EW playing out, ofc it can extend and probably will.
Bulls like this die hard, it won't rollover in a day, and the first bearish move will probably result in a buyback for a hanging man doji. You will have many opportunities to short IMO... GLTA!
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FYI & Reference, a free pdf of Murphy's text online, this is Pure Gold, cost you nothing to read it but a few hours on evenings and weekends, if you read it three times you will see things you never thought possible:
Surprising strength in small caps... hmmm, churn? Swapping techs for R2K? No position, a miss.
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Shorting QQQ, see related posts. Astounding how they runup EOD. Shoulda bought more calls, lol! Who knew?!
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Cannot emphasize strongly enough NOT to PLUNGE if you choose to short this beast. They buy evry tiny dip now, IMO this sentiment will soon change, I would not pay these crazy prices!
No price too high... No hill too steep no hole too deep no gas too cheap!
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Wow here we are at the Fibo, MoMo gone nuts again... adding, short the rips!
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Did real nice in 389 puts, closed on the fade, short if it lifts again... watching in cash atm
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Faded it again. Looks real toppy. This is dicey work, anyone ever held puts while the damned thing creeps higher for hours knows what agonal pain means IMO;
They paid off but so much damned nail-biting, FGS
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Trying a few calls... QQQ 388
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Closed all, watch & wait. Made bank from puts and calls in same day, not shabby IMO
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Yeah Bullish as all get-out, closing HOTD, utterly fearless. Look at RUT, OMG it's taking off?!?
If Fed gets Dovey this will go just NUTS.
Picked up a few VIX $17 calls just in case it tanks on Weds PM after 2PM...
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Closed the VIX calls early AM for a push. After FOMC shorted the spike, covered, shorted again, bit my nails for 20 minutes wondering if that would ever pay, finally did; up 1K on the day, calling it good.
Nicely done. I have been DCAing into SQQQ over the past month. Will hold and add slowly but your caution is noted with a potential strong impulse remaining