Title says it all, After Amazon crash I expected a more bullish structure with a wave B lower before going higher reaching above 4,000. But the Fridays (hedge fund market mechanics) short covering/ squeeze quickly invalidated that. Therefore what we have left is 4 medium sized waves to the upside and I suspect we will have one(1) more (5th wave) completing wave-C of a running flat correction creating a top at 4000-ish. Undouptablty the marker maker/ mechanics rally the over past few weeks (which I am positing will successfully expire tons of end of the month retail puts "out of the money" and just in time for a convenient FOMC rate hike to sink the market lower) has predictably left many retail traders FOMO-ing at the mouth, ready to buy market maker call options. I suspect after Monday the Bullish impulses will evaporate quickly and BEARS will regain control slowing down and then tearing down the market at the rate hike (excuse to cover blatant market manipulation) trapping many retail investors who are simplistically thinking I'm smart and the market "should" GO up at elections (as it always has) and what about the "santa-rally... huh ? For me it all depends how fast a new monthly bottom is reached. IF it happens quickly an election-rally/Santa-rally whatever is still possible but thinking a new monthly low is distinct possibility, so hold on. There a many reasons for my views (to many to explain all here) but this is basically my main Elliott count and how I plan to look at the market in the next comming weeks for trading opportunities. Currently overall still on the long side but I have been taking profits and building up a short positions as well. This is not trading advice for anyone, but a simple remainder to myself.
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FYI my basic trading rules is to build small positions over time, this is a time i see transitioning form long to short, We also don't wait to long for "just one more wave", Waiting for "one more wave" has often left us "holding the bag". Tops/ bottoms rarely happen as planned, this is why we start building positions and averaging . If for example the market shoots up into some kind of supper bullish wave 3, we will witch to longs, hold our shorts, and re-short (manage our position) at the next level. Just how we do it based on many past mistakes. and we have been making money this whole year.
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Note to Myself:
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Monitor the Dow-Jones, the Dollar and the Vix.
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For the Sake of argument : (not saying I am but IF), IF this count is totally wrong, then the path up higher would look something like this chart below:
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Still looks like bulls targeting 4,000. Not sure why or how market will push up there with the FOMC rate hike . Perhaps during the day of the speech there might be a head-fake spike up to 4,000 , who knows.
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Yellow is my main count, the cyan is bullish count for the sake of argument. Will not update on this particular post more. good luck
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: Average your positions over time, If support is found on the 3900 or the market moves above 3935 stop adding to your short position, take a break and re-short after the market goes above 4,000 to bring your average up and reduce short positions at dips (you can still make money here or at the very least break even) at major pullback and consider building long positions.
heyyy, ive been studying elliott wave for a while i want to ask what the best timeframe to pick out the big waves and what timeframe to pick out the short ones, i like how you have laid everything out i know im a little late
Peterson
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That (A),(B) leading into (C) looks like it could turn out like the last two, we'll see shortly.
Laurent10
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Helloooo...so you saying, well chart - UP to 4000 then back down to 3400 - which equates to a 600 points drop.... HARD to believe, and I'll tell you why I think that. The S&P is the only index that hasn't come below it's pre-covid level OF +/- 3400 The DJ passed it, others did, but NOT the S&P....so should it go to 4k - fair enough, I cannot see it dropping 600pts...sure 50/hundred here and there ONLY to be bought back.... Look I was short for a long time...but now can't see these markets tanking anytime soon, UNLESS FED comes in with a whopper of a number tomorrow... Equally, if I'm wrong, I'll be the first to admit it, hands up. Thanks for sharing Cheers
wolffarchitecture
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@Laurent10, thank you its great to have other perspectives. You know i respect you position and you could be right.
Laurent10
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@wolffarchitecture, Hi....thanks for your reply....hey at this stage anything can happen. In 15 ears of trading I have never experienced the markets like this -soooo unpredictable. I find that both technical's AND fundamentals are not what they used to be....also with the FEDs interest rate announcement later....even with a prediction of .75bsp - anything can happen. They can interpret it in many different ways....I fully appreciate your time and view on your take/outlook on the markets. As you say, good to see other peoples perspectives..... Lets see what happens after Fed announcement. Cheers Thanks again
SquishTrade
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Just saw your comment about the head fake spike in your update just now—this is something I was also wondering about today. It seems like a possibility now to have a final bull trap after that massive bear trap on October 13
Hi....I see we almost at 3900 now....will it go up to 4000 before a drop? Somehow I can't see this coming down anytime soon, certainly not this year....
wolffarchitecture
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@Laurent10, leaning on the short side because these prices are to high for for me. If I were bullish I would be looking for a serious pull back to buy into. IF, the market passes the 4,000 , I a 100% confident it will come back down to test it 4000 before resuming higher, therefore holding a short as close to 4,000 is a very manageable position. I can always short again above 4,000 with full confidence the average of my positions will return a profit. I still have long positions which I am letting run, until a definite top is in place. started a short on Friday at when the SPX was at 3,900 which now may be even, but even if it a few early short positions go temporary negative I can hold and average in another short at a higher price in two or three days. not worried in the leased. this is normal trading. BUT having said all that we are in a precarious place ( Not a lot of trade in play) and for MOST (including myself) it may be best to sit on your hands for a while...which requires some serous ZEN practice. All will be revealed in the next 3 days.
There seems to be a lot of Hopium, the FED will deliver a calming speech but if traders were look-in to the FED to raise the market ... It has already happened. The new rule of thumb seems to be "BUY the rumor SELL the fact".
Laurent10
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@wolffarchitecture, Thanks for your reply....much appreciated. But yeah, Wednesday...we will all know more. Cheers