I agree with you on this one although I'm a little nervous about it because in the past I have been fooled by what I thought were great setups. The other thing that makes me nervous about this particular setup is that everyone sees it. This "bearish wedge" is all over the blogosphere. Does that bother you, that if something is this obvious, then maybe it won't play out the way we are all expecting it to?
Also, on a setup like this, will you front run it at all? Will you start building a short position before SPX gets to the 1140 target, or before the wave structure looks complete?
I like to wait for price action to confirm what I'm expecting, but in this case, we could see a very rapid move down that could even begin during the globex session, starting in Asia for example, and as a result miss a big junk of the first part of the move. Moreover, if you are planning to capitalize on the move by using VXX for part of your position, it's important to have some of the VXX position before the move down begins.
Hi Repro, Really like your analysis adding time to the price action. I am trying to add time to my chart as well but can't seem to figure out how to add time fib to the charts in ameritrade. Can you please guide me. Thanks
pima -I starting buying SPY puts today for insurance just in case something happens early this week. If this thing doesn't start down by Monday next week, the odds go way up that it will be middle Sept from 1170. So, holding puts for a week isn't going to hurt too bad if the market doesn't do what we think it will.
Pree - I am on TOS, I don't know if TDA has fibo time extensions on their charting software. They bought TOS so that's why it shows up on my charts.
I am considering playing this one by going long VXX. I may start building a position tomorrow morning if VXX is still cheap. It spikes pretty quickly to the upside whenever there's a sharp move to the downside on SPX, even if the move doesn't go very far. So it seems that with VXX I would get the best leverage to front run this a bit (probably similar to getting the best leverage by buying SPY puts), start a small long position while VXX is quiet, then maybe add to the position (or go long SDS or short SPY) once price confirms the move down.
Here's an alternate count: July 1 low was bottom of Primary 1 or Primary A, move up since then is playing out as an ABC zigzag. The C of the ABC began at the July 20 low and is POSSIBLY playing out as an ED.
6 comments:
Hi Repro,
I agree with you on this one although I'm a little nervous about it because in the past I have been fooled by what I thought were great setups. The other thing that makes me nervous about this particular setup is that everyone sees it. This "bearish wedge" is all over the blogosphere. Does that bother you, that if something is this obvious, then maybe it won't play out the way we are all expecting it to?
Also, on a setup like this, will you front run it at all? Will you start building a short position before SPX gets to the 1140 target, or before the wave structure looks complete?
I like to wait for price action to confirm what I'm expecting, but in this case, we could see a very rapid move down that could even begin during the globex session, starting in Asia for example, and as a result miss a big junk of the first part of the move. Moreover, if you are planning to capitalize on the move by using VXX for part of your position, it's important to have some of the VXX position before the move down begins.
Any comments on how you might play this?
Hi Repro,
Really like your analysis adding time to the price action. I am trying to add time to my chart as well but can't seem to figure out how to add time fib to the charts in ameritrade. Can you please guide me.
Thanks
pima -I starting buying SPY puts today for insurance just in case something happens early this week. If this thing doesn't start down by Monday next week, the odds go way up that it will be middle Sept from 1170. So, holding puts for a week isn't going to hurt too bad if the market doesn't do what we think it will.
Pree - I am on TOS, I don't know if TDA has fibo time extensions on their charting software. They bought TOS so that's why it shows up on my charts.
thanks, Repo.
I am considering playing this one by going long VXX. I may start building a position tomorrow morning if VXX is still cheap. It spikes pretty quickly to the upside whenever there's a sharp move to the downside on SPX, even if the move doesn't go very far. So it seems that with VXX I would get the best leverage to front run this a bit (probably similar to getting the best leverage by buying SPY puts), start a small long position while VXX is quiet, then maybe add to the position (or go long SDS or short SPY) once price confirms the move down.
Thanks Repo. I will try it out. Great site indeed.
Here's an alternate count: July 1 low was bottom of Primary 1 or Primary A, move up since then is playing out as an ABC zigzag. The C of the ABC began at the July 20 low and is POSSIBLY playing out as an ED.
Here's a screen shot:
http://screencast.com/t/ODQ2NjVjOD
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