Recap & Stance: Another whiff of bullishness. This only shows there are a lot of shorts caught out there, especially when the market turned at 666. We at right at the confluence of the blue and green trendlines above.
Today looked like a small 3rd wave of some sort. We still like to think this was all within the context of a 'b' wave and what we have going on in terms of labels is an expanded flat, which means in the next week into our cycle date, we may top out and hit the purple line from the top, which should be a buying opportunity.
We may have a struggle of a day (or slightly down) tomorrow (friday) before a last gasp up day on monday. We should ideally top out sometime on monday, according to the above scenario.
We also have some healthy negative divergences in the price action to stochastics. So a down move is coming soon. The encouraging thing to note is this rally has done something which the market has not since June 2008, push its head over the 20W moving average. If & when, the 5WMA exceeds the 20WMA, we should see another take off, this would probably be the trigger for a weekly long position.
Trades:
We made a scalp long trade today (SPY @84 calls), in around SPY 83 and were stopped out at 84, for an "alright" profit. We still have about 25% of our position on, in the lieu of the scenario described above.
Addendum:
We may look to add some SDS if we get near 847 or if we break 823 decisively. We still think 760 on the SPX is doable in the coming weeks.
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