SPY + US Equities Pullback
Here's the zoomed in view of the correction we've had over the last few weeks since the crash.
We're at resistance now and have put in / nearly finished putting in a textbook ABC retracement of the bear move. I mentioned in my previous zoomed out view post, the different possibilities already. Based on my larger supercycle count, we're still in a Wave 4, however the charts here are just based on recent price action. These are the charts I use to make my trading decisions.
In this chart you can see 3 paths. The two green ones turn this crash into the start of a new bull market. Although they are possible and even arguably likely (fundamentals), they are not what's most probable based solely on technicals in my mind right now. The current crash can too perfectly be interpreted as an impulse down (in red) and the current bounce has been perfectly textbook as well. The most probably count given the current technical information is the zig-zag in red.
How would I trade this? I'm going to reevaluate as more information comes in but I'm currently flat in my positions. The next down move could be very sharp - too sharp for me to react potentially and I always believe there is plenty of opportunity out there. I don't believe there's good risk reward in the markets right now. As we pullback, I will try to pick turns with tight stops and see if any of the more bullish counts play out. Price and time will reveal the true path.
On a Macro level, I worry about a few things:
• Tech companies are still parabolic
• If we're in a major Wave 4, Wave 5 should be totally illogical and euphoric. Although we felt some of that before the recent crash, I don't think it was palpable enough on a super cycle basis. There are a lot of people that still want to "buy the dips" and be Warren Buffet.
• It's possible that everything is overvalued (gold + BTC + equities + tech stocks included)
• It's possible this bounce perspective is too crowded. I think most technicians agree with this view. I would like to see less conviction from people and a more bullish sentiment in the public.
We're at resistance now and have put in / nearly finished putting in a textbook ABC retracement of the bear move. I mentioned in my previous zoomed out view post, the different possibilities already. Based on my larger supercycle count, we're still in a Wave 4, however the charts here are just based on recent price action. These are the charts I use to make my trading decisions.
In this chart you can see 3 paths. The two green ones turn this crash into the start of a new bull market. Although they are possible and even arguably likely (fundamentals), they are not what's most probable based solely on technicals in my mind right now. The current crash can too perfectly be interpreted as an impulse down (in red) and the current bounce has been perfectly textbook as well. The most probably count given the current technical information is the zig-zag in red.
How would I trade this? I'm going to reevaluate as more information comes in but I'm currently flat in my positions. The next down move could be very sharp - too sharp for me to react potentially and I always believe there is plenty of opportunity out there. I don't believe there's good risk reward in the markets right now. As we pullback, I will try to pick turns with tight stops and see if any of the more bullish counts play out. Price and time will reveal the true path.
On a Macro level, I worry about a few things:
• Tech companies are still parabolic
• If we're in a major Wave 4, Wave 5 should be totally illogical and euphoric. Although we felt some of that before the recent crash, I don't think it was palpable enough on a super cycle basis. There are a lot of people that still want to "buy the dips" and be Warren Buffet.
• It's possible that everything is overvalued (gold + BTC + equities + tech stocks included)
• It's possible this bounce perspective is too crowded. I think most technicians agree with this view. I would like to see less conviction from people and a more bullish sentiment in the public.
註釋
The lower green bull count would be the case for a leading diagonal - this is an unpredictable pattern and needs more price structure to map or project out, so please ignore the levels here. I just placed the wave form to give an idea of the possible shape.註釋
We've now made 3 legs up instead of the two. That rules out this recent rally from the lows as a corrective wave. It's not a valid impulse, meaning we can expect a pullback and another leg up.I still expect a pullback at resistance. We should see a pullback followed by another impulse.
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