Retail activity and strength is starting to transition towards excitement and complacency, when this happens Equities should be sold with confidence for a retest of the March lows.
📍 Here the following line appears the cleanest: 3240/50 => 2640/50 => 2060/70 and Sellers are not particularly favourable. The retail crowd are piling into longs and even some of the large names are flip-flopping. This is a good example of the 'end game' in an economic cycle, volatility expands to historic levels and there is no room for emotion.
Here we are going to start to see VIX lead the way and direct the Global Equity flows in a violent struggle to the downside. I can only recommend that those who managed to catch their slice of the pie on these difficult legs higher start to unwind, while those who are actively looking for more pain - start to position accordingly.
A good plan now would be seize the hotly contest 10,500 in NQ which will open up the central battlefield:
I really like the above diagram, although there was at this point a chance buyers would tactically run stops with additional fiscal stimulus. This is of course more the logical move, because Uncle Sam and the Whitehouse generosity is losing tempo, meaning that the downside is ripe for a swift invasion!
For those who remember the moves in DAX, there is no doubt that the complacent environment in Q1 is completely the same in Q3.
Buyers are going to commit the strategic error of going overboard thinking that 'stonks only go up' ...while Keynsians economics is reaching the final stages as we witness in real-time that supply chains and demand are not set up in such a way that covid and lockdowns means turn the printers on full and business as usual society will resume. It is only making the inevitable a lot lot worse, Oct Puts look very attractive.
Sellers to move. Ask yourself how should we punish our opponent for having been so complacent during his last few months?
As usual thanks for keeping the feedback coming 👍 or 👎
You do realize that B corrective wave is never measured using 1,2,3,4,5 impulse count
Inorogu
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@Pheneck, Agreed! And that is defo not an ABC pattern lol
Pheneck
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@ANDREI.iancu, yea its not, just seems like trying to fit personal bias. Market might eventually drop down, but that definitely isn't the right analysis for that
Inorogu
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@Pheneck, i truly understand that this is a public place where people post charts and ideas but when you have ideas like that and you have notoriety it is a bit sad because people follow you blindly. Although his chart is not that off because we will go down, but not that hard to 2000 area. I hardly believe that ...2,700 is more reasonable
ridethepig
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Indeed @Pheneck, the aim here with 'outsmarting your opponent' is that we are tracking the sell side from a buyers perspective
@Pheneck, agreed. While I agree this baby is going down the above count violates multiple Elliot rules. Wave iv of 3 is ridiculous. Wave B can never be 5 waves as you said. I count Feb to Mar down either as ABC or A (5 subwaves) and the rise since either a double or a triple zigzag B. I see no possibility of counting the rise since Mar lows as impulsive or in 5 waves - especially when you see the overlaps between "4" and "1" I see many trying to force in the futures. In the end, I guess I still label the rise since Mar lows as wave B but the internals are not the same as above which violates as I said multiple hard and fast Elliot rules.
Boatsnhoes
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Thanks for the laugh
ridethepig
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@Boatsnhoes, nothing so sad as the laughter that hides a broken heart.