Market has no patience

Its quite interesting seeing the overnight moves here - it seems the market has no patience at all. Generally when looking at corrective moves to absorb sellers and flatten out overbought conditions - the market will spend a minimum of 30% of the advance in terms of time going sideways, generally its even more. Look at the market here? barely even one day as a breather before wanting to continue.

Ok quite important today. USD yet again taking a beating which is helping the futures move higher as we speak. So the question we have to ask ourselves - what kind of move should we expect, how can we profit from it, and how do we protect positions (if you are short you are scared, if you are long you may want to look for a hedge or partial exit).

Initially I had given a high probability scenario to a failed 5th wave, meaning a marginal new high on SPX. I still believe this to be a high probability scenario - however a few things are going against it. One we have light volume and we have to deal with lots of stops just around the 1100 range - once those stops get hit, well you know what happens with all the short covering.

Its 4:15AM now, so we have a bit of time left before cash hours but I do not expect any strong reversals - remember our definition for a stepping day - 1% GAP will set the low within 15 minutes 2-3 points off the open and the first morning high within an hour of the low. This has worked like a charm the past few times so we have to watch this again today.

So what are my scenarios ... start with the lowest probability one.

1) no new high or high at open, sell off at cash hours open - well this to be honest should not be happening today. We have nothing going for this move, limited economic news, forex not indicating any type of reversal

2) failed 5th wave, marginal new high - this move should set the high before 10:00, most likely by around 9:45-9:55 at price levels close to 1107-1110

Now regardless of how high we may go, the close price in comparison to the open will become very important - if the close will be set below the open price. We have a high probability for a reversal - but lets not dream up a bear case here and go for our last, to be honest, most probable scenario.

3) stepping day with a close towards the high of the day on lower volume. For a move like this, we should be expecting a minimum move of 1110 most likely higher. Remember the chart from 2 days ago for our W5 targets.

Will post more updates before cash hours depending on pre-market action, but do not expect much of a change here.

Not much to say today

Pretty much what we expected with a corrective move - we made a marginal new high but remained in a tight range most of the day - the close is quite classic for a distribution day -0.01 for SPX.

I stayed out of trading today, tried one scalp but exited within 15 minutes at break even price. I had added a small chunk of puts but waiting on the last position. Those I will most likely add above 1115 SPX only.

As I am typing this I am seeing some big moves after hours (at 7:18 which is a bit odd). Printing 5+ pts above close price around this hour is not all that normal. Going to have to figure out what happened here.

The amazon short I had taken is at the edge of my pain point. 133 price target is my current mental stop from an average of 126.50. Lets see how that one plays out.

Hope you all are doing ok. Say hello every once in a while ... I am feeling lonely =)

Temptations

guys - I just wanted to say something. You cannot imagine how much I have to hold back going in heavier here on the short side - yes we have the risk of more upside. But if there ever has been a time to risk being short.

Ultimately I agree the probabilities of higher prices are very real - but regardless of whether this is a bull or not. We have a very narrow risk margin now when looking at 4+ week positions. Even if the trade does not work out you are within 1-3% (10-30SPX points) of the key upper ranges.

I am holding back here - the old Chris would have gone in much stronger. Believe it or not I am happy not being the old Chris anymore. Yes we have a great opportunity here but its all about managing risk and preserving capital.

10300 DOW

Could it be that we will reach this level today? It would have enough room to make another marginal SPX high or double top. Only 50 DOW points (5 SPX pts) away.

Lets see .... would not count it out as a possibility.

Some more charts of awesomeness !!!

First one is the most insane 15 min chart I have ever seen. Last week was ranges from heaven - I loved last week and banked some nice coin on all the ranges that we were able to trade. Today - the day after we have hit 10+% unemployment we get the weirdest looking chart ever seen. Got to admit - its been quite rare to see something like this with absolutely no pull back and no intraday move. As you know I scalped 3 times today - total of 4.25 points loss - quite scary that we did not have a single retracement of at least 4 points off the highs.

Next ....

That one is quite pretty as well. EURUSD made a NICE overnight move but as soon as cash hours opened - nothing, nada, nichts - just kept on trending lower for a descending triangle that should initiate W4 on SPX. The yellow circle is where I got stopped out today - darn. I had overlayed this with ES - you can see the crazyness of the rally in comparison to the dollar. Where is the relationship? I cannot spot it here ... I had said last week that I believe we are on the verge of a big move in the dollar - could it be that the dollar will go even lower then it already is? I expected strengthening but lets see - keep in mind we are talking about a major trend that had been developing so a trend change of this nature may take a wee bit longer.

Saved the best for last ...

Chart is self explanatory - 2 more closes outside this upper trendline and well. If you are a bear you are exciting when you see this chart - if you are a bull you are excited when you see this chart. OR the other way around - a bull is scared, a bear is scared. It seems whether you are bullish or bearish - you should be finding yourself on the extreme end of the spectrum at the moment with all those patterns right in front of our face.

Out of 100 technical patterns - I am sure we can find 30+ good ones with high probabilities here that will put in a great bullish and great bearish case. Lets see how this will look once the month is over.