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I'm seeing everyone get really bullish here lately... A little too bullish... This is my updated wave count outlook, as well as some other observations too.
I believe we appear to be setting up as a 1-2-1-2 of an extended 3rd wave down (big trouble), or hey - we could just keep floating up forever, who knows.
"Fundamentals!" I know, I know... "Dovish Powell!" Right, right... "Deal with China!" Yes, I've heard all the "reasons" we should go up, but these are all speculative.
Let's look at the facts for a second -
1. Every major index other than DJI (the Dow) and SPX (S&P 500) has already closed in a bear market (this isn't something you just do in a nonchalant fashion and walk out of saying "ehhh, never mind").
2. Where's the volume?
3. Slope: Go back and look at a Wave 3 on prior bull moves - they shoot up very sharply, more than the preceding move. That is not what we are seeing here
as the slop has begun to lose steam, not pick it up.
4. We are still in what is extremely common ground for Wave C to extend to - almost textbook, you could even say. A Wave 2 zig zag usually doesn't pass the preceding Wave 1 of the smaller degree - in this case that is exactly the 0.786 retracement level off the high in December.
5. RSI is diverging bearishly across almost all time frames.
6. Have you seen the VIX? Go look at prior bear markets - the VIX bases at 16 and remains above it. This is exactly what we have done now since October - a decisive drop beneath 16 would be needed to kill the bear case. A 12% drop in Feb took us to 50ish, yet a 20% drop didn't crack 40? I believe that's because the VIX has other plans. Also - VIX has been making gradually higher lows.
I think anywhere over 2685 is a decent place to short (puts), stop at slightly over 1.618 in the pic. Even if this was a first wave impulse - you can likely expect a 0.5 to 0.618 retrace OTW down (green area goes to 0.618).
This thing has had people balling up their charts left and right! (Me included) - so trade safely!
Other notes: First, the top of 3 in the diagonal isn't concrete until it turns. (pic intended to provide a visual). Second, a 5th wave could double top, as well as have some throw over. Third - I have this drawn as a contracting diagonal - though it could very well play out to be an expanding one.
Sidenote: Prior model is slightly diverging from the action, but I am still watching it closely!
I'm seeing everyone get really bullish here lately... A little too bullish... This is my updated wave count outlook, as well as some other observations too.
I believe we appear to be setting up as a 1-2-1-2 of an extended 3rd wave down (big trouble), or hey - we could just keep floating up forever, who knows.
"Fundamentals!" I know, I know... "Dovish Powell!" Right, right... "Deal with China!" Yes, I've heard all the "reasons" we should go up, but these are all speculative.
Let's look at the facts for a second -
1. Every major index other than DJI (the Dow) and SPX (S&P 500) has already closed in a bear market (this isn't something you just do in a nonchalant fashion and walk out of saying "ehhh, never mind").
- RUI (Russell 1000), RUT (Russell 2000), and RUA (Russell 3000)
- IXIC (Nasdaq Composite) and NDX (Nasdaq 100)
- MID (S&P 400), SP600, and SP1500
- NYA (NYSE), DJT (Dow Transports), and TRAN (Nasdaq Transports)
2. Where's the volume?
3. Slope: Go back and look at a Wave 3 on prior bull moves - they shoot up very sharply, more than the preceding move. That is not what we are seeing here
as the slop has begun to lose steam, not pick it up.
4. We are still in what is extremely common ground for Wave C to extend to - almost textbook, you could even say. A Wave 2 zig zag usually doesn't pass the preceding Wave 1 of the smaller degree - in this case that is exactly the 0.786 retracement level off the high in December.
5. RSI is diverging bearishly across almost all time frames.
6. Have you seen the VIX? Go look at prior bear markets - the VIX bases at 16 and remains above it. This is exactly what we have done now since October - a decisive drop beneath 16 would be needed to kill the bear case. A 12% drop in Feb took us to 50ish, yet a 20% drop didn't crack 40? I believe that's because the VIX has other plans. Also - VIX has been making gradually higher lows.
I think anywhere over 2685 is a decent place to short (puts), stop at slightly over 1.618 in the pic. Even if this was a first wave impulse - you can likely expect a 0.5 to 0.618 retrace OTW down (green area goes to 0.618).
This thing has had people balling up their charts left and right! (Me included) - so trade safely!
Other notes: First, the top of 3 in the diagonal isn't concrete until it turns. (pic intended to provide a visual). Second, a 5th wave could double top, as well as have some throw over. Third - I have this drawn as a contracting diagonal - though it could very well play out to be an expanding one.
Sidenote: Prior model is slightly diverging from the action, but I am still watching it closely!