What a day!
I was hoping the bulls would take the rein at the end some wave C drop and impulse us up, but, instead, we witnessed a tight battle between the bulls and bears. The outcome of this battle is left for another day.
I guess technically we should all be happy about a reversal day. I just can’t help but see the entire move today as a corrective chop-shop. A happy bull I am not, not yet.
Market gave enough time to me to setup some spreads on the calls I bought yesterday and reduce the cost. I attempted a short but did not make much at it.
There was also more than ample time to asses and re-assess the situation.
Half way through the day, the choppy (aka corrective) pattern started to reveal itself. I bought some puts at the close.
Let’s take a look at this 15-minute chart
Notice how the index played between the two pivots of 852 and 882. Also notice how the rise off the opening low is corrective. It may still go further up, but as a pattern, it does not look like a solid foundation for a good rally.
On a daily time frame, S&P can be viewed as consolidating. There were, however, more issues making new lows.
All intermediate buy signals are still valid.
Let’s take a look at daily VIX
We need this to drop to support a good rally. Right now, it is sitting at the lower edge of what looks like a symmetrical triangle, which, as a pattern, has a higher probability of resolving to the side of previous trend, which, in this case, is up. Higher probability is not 100%, so, let’s hope it soon collapses and invalidates the triangle formation.
Monday should be an intresting day.
Enjoy the weekend!