ZanderGoh
Short

SPY Megaphone

OANDA:SPX500USD   S&P 500 Index
AMEX:SPY

A megaphone technical setup happen when theres a widening interest in demand and supply on what is actually fair value zone that they wanted to buy in. Thus causing a bigger and bigger swing in the top and bottom floor and ceiling of prices.
Comment: Cherry picking the top,

Biggest mistake that Ive done so far would be anticipating market turning point, thus causing me to always be losing money especially couter trend moves. Rather than Anticipation/predictive moves, why not wait for market to let u know when they have turned. + alittle Strong up volume moved in the right direction?

Compounded with little time to expiry options. Adding more undue stress to the position.

Comments

Hi! I completely agree with your analysis! In addition to it, I would like to share my thought as an integration to your short sentiment, which I full agree with: February 20th high and March 23th low, might also represent top and bottom of a diamnod pattern under formation, where the left part of the diamond has already been formed, while we are now waiting for the development of the right side, completing the pattern. And this is also an heavily bearish signal. This same pattern is pretty visible across many stocks, like Disney, Amex,Walmart, Home Depot, just to mention some of them..
All this, combined with the fundamentals of the economy, will lead in my personal view to a second much heavier bearish wave. But I think it might take months, probably also couple of years to reach the bottom.
For this megaphone (or diamond) to be completed it will take lot of time, but once we reach the bottom... there might be extremely good opportunity to buy at the lowest prices ever...
Reply
ZanderGoh FrancescoMerlettini
@FrancescoMerlettini, Awesome its great to hear from someone who shares the same sentiments. On a weekly chart im sure it will take awhile to form. But i guess its exciting times now im actually waiting for it to retest 3030 level for the last resistance beyond 3000 psycological level. The signal given if its heavy selling might just give me a green light to short.

It can be a good place where smart money will tend to push up to trigger lots of stops at that level. Cheers!
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