Here's the two main options we favor. I put them both on the
same image for simplicity and one easy reference point
1. that pullback and Friday's reversal completed a wave 4 and we
start wave 5 to a new high
2. The option option (don't discount this), that Friday's move
was a combination of ODT options expiring, short covering, and end
of month, a bull trap, and price stalls out near that supply zone
forms a lower high then heads down again - and target areas to the
downside are noted below. Closing above that supply zone and
the 0.786 Fib greatly diminishes or negates this option
Posted by DigiNomad on 2nd of Jun 2024 at 04:57 pm
There is always a bearish and a bullish scenario in play.
However, when was the last time the bearish probability played out
in the medium term, even when most of us deemed it a much higher
probability? Maybe 2022? But even then, I remember that we favored
additional downside when that downturn turned, and it turned hard.
All bullish probabilities in this environment probably need
to be computed and then bumped up by 30 - 50%. This is mostly
why I think Tom Lee is secretly basing most of his calls on the
probability of continued currency debasement (which is essentially
100%). It's the only way I get the math to work.
Steve knows an Algo guy who has been very good this year - near
the highs he was calling for 150 or so points to the downside on
SPX, which we got! And we discussed this 1 1/2 weeks ago - that
played out.
Interestingly - that same Algo says temporary bounces and look
to fade such moves.
anyway, we'll see if he's right again or not - he's been nearly
perfect all year
Market Scenarios
Posted by matt on 2nd of Jun 2024 at 03:51 pm
Here's the two main options we favor. I put them both on the same image for simplicity and one easy reference point
1. that pullback and Friday's reversal completed a wave 4 and we start wave 5 to a new high
2. The option option (don't discount this), that Friday's move was a combination of ODT options expiring, short covering, and end of month, a bull trap, and price stalls out near that supply zone forms a lower high then heads down again - and target areas to the downside are noted below. Closing above that supply zone and the 0.786 Fib greatly diminishes or negates this option
This is a very helpful
Posted by skwan1940 on 2nd of Jun 2024 at 05:03 pm
This is a very helpful depiction and it helps me understand quickly what you are thinking currently, thanks Matt
0.786 Fib - is the
Posted by foody518 on 2nd of Jun 2024 at 04:32 pm
0.786 Fib - is the significance of this one that if it is regained, probabilities favor a retest of the prior highs?
There is always a bearish
Posted by DigiNomad on 2nd of Jun 2024 at 04:57 pm
There is always a bearish and a bullish scenario in play. However, when was the last time the bearish probability played out in the medium term, even when most of us deemed it a much higher probability? Maybe 2022? But even then, I remember that we favored additional downside when that downturn turned, and it turned hard. All bullish probabilities in this environment probably need to be computed and then bumped up by 30 - 50%. This is mostly why I think Tom Lee is secretly basing most of his calls on the probability of continued currency debasement (which is essentially 100%). It's the only way I get the math to work.
Steve knows an Algo guy
Posted by matt on 2nd of Jun 2024 at 05:23 pm
Steve knows an Algo guy who has been very good this year - near the highs he was calling for 150 or so points to the downside on SPX, which we got! And we discussed this 1 1/2 weeks ago - that played out.
Interestingly - that same Algo says temporary bounces and look to fade such moves.
anyway, we'll see if he's right again or not - he's been nearly perfect all year
Thx for sharing it !
Posted by mla127 on 2nd of Jun 2024 at 07:43 pm
Thx for sharing it !