Red, if you believe the teal line will hold, I think it will come down before Monday. Problem is, I don't know how much it will come down by next Friday. I may actually take a huge loss on my May puts and go into June ones instead.
I'm leaning to believe that they will tag that 1180 area (+/- a few points), and hold it through Friday, so the retail people will think everything is OK again, and go shopping over the weekend again… spending more money they don't have.
Then, as every trader knows by now, option expiration weeks are almost always bullish. Many will go long over the weekend, as you also have the usual bullish Monday too.
But, I don't think that is what's going to happen next week. I'm not going to say “what”, as I might jinks it. Remember, the last 3 times I put up the cool picture, nothing happened.
Maybe the picture needs a “Black” background of lightening, instead of “Red”, before it will work? Since I took 3 swings at it, and struck out, it's time for the pinch hitter to replace it… don't you think?
Yes, I agreed…. tops are very hard to predict. Sure I'd love to have waiting until now to go short, but I'm with you on getting in at 116-ish. If I didn't get in, it would have fell without me… just my luck.
Iron sharpens iron. I'm finding that I'm getting much better at trading thanks to having people to bounce ideas off of. Still have a lot to learn, of course.
I spent some time looking at Cobra's chartbook, notably his chart 0.1.1 SPX Intermediate Trading Signals, and we are at a particular crux of price movement (see MACD and stochastics) and put-call ratio that could go either way. We could have the crash scenario (see Sundancer's posts) which I think makes a lot of sense and am following, but there is a potential trap the way I see it.
We could also buy our way up to the 1180 level, jump it with a gap opening, and start a bull rally (not that it may necessarily last long). It is clear that the market has much breadth, and the pattern of new highs indicates that we should have further to go.
Of course, all these buyers could also represent a new crop of sellers, with their net worth (which is paper anyway) disappearing into thin air and relieving the threat of inflation. So that bolsters the bear market case. Cobra has also pointed out some chart formations that support the bear case (Bearish Engulfing, Rising Wedge, Ascending Broadening Wedge).
I am going to buy some calls today as a hedge. It should only cost a few hundred bucks and give much peace of mind. I will also add to my short position as we approach 1180.
Carl’s morning call:
June S&P E-mini Futures: I think that last week's low at 1056 ended the correction from 1216. Today's range estimate is 1157-77.
1165.25-1174.75 range last night (9.50 points)
1157-1177 estimate for today (20 points)
1167 currently, so estimate is -10 to +10 from here (neutral)
I'm wrong on most of my calls, so let's hope I'm wrong on this one too.
Red, if you believe the teal line will hold, I think it will come down before Monday. Problem is, I don't know how much it will come down by next Friday. I may actually take a huge loss on my May puts and go into June ones instead.
Gang,
I'm leaning to believe that they will tag that 1180 area (+/- a few points), and hold it through Friday, so the retail people will think everything is OK again, and go shopping over the weekend again… spending more money they don't have.
Then, as every trader knows by now, option expiration weeks are almost always bullish. Many will go long over the weekend, as you also have the usual bullish Monday too.
But, I don't think that is what's going to happen next week. I'm not going to say “what”, as I might jinks it. Remember, the last 3 times I put up the cool picture, nothing happened.
Maybe the picture needs a “Black” background of lightening, instead of “Red”, before it will work? Since I took 3 swings at it, and struck out, it's time for the pinch hitter to replace it… don't you think?
I got it – thank you very much.
Thank you SC.
Yes, I agreed…. tops are very hard to predict. Sure I'd love to have waiting until now to go short, but I'm with you on getting in at 116-ish. If I didn't get in, it would have fell without me… just my luck.
Iron sharpens iron. I'm finding that I'm getting much better at trading thanks to having people to bounce ideas off of. Still have a lot to learn, of course.
Tops are hard to pick. So far, I'm pretty happy about going short 116-ish. It could well have dropped from there, and I'd have missed it.
Possible alternative scenario?
I spent some time looking at Cobra's chartbook, notably his chart 0.1.1 SPX Intermediate Trading Signals, and we are at a particular crux of price movement (see MACD and stochastics) and put-call ratio that could go either way. We could have the crash scenario (see Sundancer's posts) which I think makes a lot of sense and am following, but there is a potential trap the way I see it.
We could also buy our way up to the 1180 level, jump it with a gap opening, and start a bull rally (not that it may necessarily last long). It is clear that the market has much breadth, and the pattern of new highs indicates that we should have further to go.
Of course, all these buyers could also represent a new crop of sellers, with their net worth (which is paper anyway) disappearing into thin air and relieving the threat of inflation. So that bolsters the bear market case. Cobra has also pointed out some chart formations that support the bear case (Bearish Engulfing, Rising Wedge, Ascending Broadening Wedge).
I am going to buy some calls today as a hedge. It should only cost a few hundred bucks and give much peace of mind. I will also add to my short position as we approach 1180.