In the last chart I fell prey to the same insecurities that plague less experienced traders like myself. We visualize our convictions on the market rather than going with the flow. I present two possible bearish harmonics on SPY objectively. This index is most closely aligned with Fibs.
In the most likely case (Fed intervention mutes wild swings), we back down to 265 at C and then rise up to D at 0.786 fib. In a more bearish scenario, the market retraces to about 0.886 of the March lows and rallies up to D. Judging the time is beyond me so take it for what it is worth - a bunch of stuff in my gut.
Once we reach D, we should expect a retrace of the length of XA. With Fed intervention, we may able to get away with a double bottom (or a triple bottom) or even less. I am not aware of rules around the bearish retrace from D. I have seen every fib possible. Please enlighten if there is any academic collateral on that.
Reason for my leaning bearish is that the VIX and trading volume have gone down substantially. Market Makers are not making money selling you puts and then burning you. No hookers and cigars for them till then. They have all this cash on loan from Fed that needs to generate more money. Your put money fills their coffers with real cash. Fed is not taking hyper-inflated stocks in lieu of their loan. At least, not yet!
As always,
Caveat Emptor and good luck!
In the most likely case (Fed intervention mutes wild swings), we back down to 265 at C and then rise up to D at 0.786 fib. In a more bearish scenario, the market retraces to about 0.886 of the March lows and rallies up to D. Judging the time is beyond me so take it for what it is worth - a bunch of stuff in my gut.
Once we reach D, we should expect a retrace of the length of XA. With Fed intervention, we may able to get away with a double bottom (or a triple bottom) or even less. I am not aware of rules around the bearish retrace from D. I have seen every fib possible. Please enlighten if there is any academic collateral on that.
Reason for my leaning bearish is that the VIX and trading volume have gone down substantially. Market Makers are not making money selling you puts and then burning you. No hookers and cigars for them till then. They have all this cash on loan from Fed that needs to generate more money. Your put money fills their coffers with real cash. Fed is not taking hyper-inflated stocks in lieu of their loan. At least, not yet!
As always,
Caveat Emptor and good luck!
Comment:
Be aware that there is a possibility for upward movement of prices. Presenting an idea from futures market of the index that seems to suggest a reversal. Not sure if this harmonic will be damaged overall. Both can co-exist up to a point.
Comment:
Wanted to point out that the above harmonic is a very short term harmonic compared to the larger timeframe harmonic from the main idea. Market will zig-zag its way down.
Comment:
Here is a harmonic from ES that is also at a shorter time frame and corroborate the 265 target of SPY. It has much better alignment with numbers as ES has more time and room to paint a clearer picture.
www.tradingview.com/...t-Bullish-Butterfly/
www.tradingview.com/...t-Bullish-Butterfly/