SPX: Possible Paths to ATH from 2nd of Three Drives

4 нояб. 2019 г.

OF course this is pure guesswork and sheer speculation. Maybe the ATH is already in on Friday. Although futurez are up as I write this, their fair values point to nearly the same prices we saw near the close Fri PM.

I marked this chart idea as Neutral, although it's really short-term bearish and longer-term bullish, until it becomes Bearish again in 2020.

A lot of new money will have to flow in to push higher from here, market is already in overbought condition.

It is a 3-Drive pattern, and an EW Ending Diagonal Triangle (see Mark Rivest post on the EDT for detailed insight- very fine analysis, kudos Mark and ty!):

I show two alternate paths in my idea. Many others, of course are possible:

Although overbought atm, but irrational exuberance could simply parabola up to the 1.62 Fibo at 3124, before distribution; or a bull wave pullback could begin this week and carry index down to retest the lower channel TL (in pitchfork).

A last desperate parabolic climb to stratospheric prices is likely to occur in January, two years since the last time we saw that in Jan 2018.

Expect a pullback soon in Nov, a terrific bullup to ultimate ATH, and another big break in Feb/Mar for Fib time and price.

IDEA: Just buy UVXY to play this rotation; accumulate VIX ETF shares when VIX <12. UVXY is the Proshares 1.5x ETF; when Vix gains/loses $2, ETF gains/loses $3.
On the last explosive Third Drive to the Top the VIX could get crushed to sub-10, as it was in Dec 2017 when it touched $9. Do not buy it too soon!

NB: You can also buy call options on VIX itself if you want max leverage and have strong appetite for risk. I suggest getting a LEAP call if you do; on Friday the April 2020 $20 call was $2.30 with Vix at $12.30. It's a pretty fair risk/reward, considering that in Feb 2018 VIX jumped from $9 to $29. High price on VIX was $70 on 10-01-2008.

This is not trading or investment advice, it is rank, sheer speculation on my part. Gamble on the futurez at your own risk! GLTA!

4 нояб. 2019 г.

Сделка активна

Loaded up on UVXY and Jan index puts in opening buy panic- looking good for the moment! VIX broke under 12 in early trade.

4 нояб. 2019 г.

Заметка

Opps MB VIX went 12.44 now lifting >12.80, it rises in a rising market, a signal!

7 нояб. 2019 г.

Сделка активна

I am holding and adding. Bought more VIX Nov 27 $15 calls. Rolled DIA 275 Dec puts to strike 278 ITM contracts. Closed 80 short puts for 0.03c, and wrote higher strikes. Sold a few UVXY calls which I immediately regret, as they stand ATM EOD.

Holding Jan SPY 310P, IWM 160P, QQQ 200P. Short weekly 307s, 157s, 197s.
Rolled up to DIA 278P, short Nov 273s, as all the 08 Nov puts went to pennies.

At EOD I had to roll some of the short weeklies down again in QQQ, SPY & IWM, dammit! They went ITM. Indexes gave back most intraday gains to produce a shooting star Doji; all under pressure and substantially weaker EOD.

This is defensive tightening of a weak position, and I'm not proud of it, but not in panic yet. Lot of time in these long contracts to write more weeklies and temporize. Being long here would've been a lucky bet, calling tops is just impossible! Add more Friday if it bulls again...

Net drawdown ~10% on position after rolling the shorts for near 95% gains. This is why I don't buy weeklies! They just vaporize. Selling them cut my unrealized loss by ~67% :-)

Price appears poised to follow the upper path in this model; HOTD 3098 nearly touched 3100 today; the 1.62 Fib at 3124 is just a short bull run away. Can they do it?! Or was that all she wrote?

This price action has hallmarks of exhaustion gap. We nearly closed gap, RUT did close intraday; EOD short-covering rallied price in last minute. Look at Friday's candle; going into a long weekend, likely to see risk-off by EOW IMO.

This game takes nerves of steel and deep pockets. My nerves just a little frayed atm, but my pockets are nearly tapped, lol.