The market was up today, as as expected. Overnight, we got the B-wave down that we expected — a little but farther than we expected — towards 1851.25 – and then it rallied to open at around 1880. This pretty much matches what we posted on the chart yesterday.
We tested the 1899 region once again — and pulled back to the 1887 region and consolidated there. We may make another attempt to break this area that served as resistance for the top of wave A. It wasn’t until the last 20 minutes that the market started to push up.
If wave A was from 1804 all the way to 1904 — basically 100 points, and wave B fell to 1851 — so basically 53 points, we could get potentially another 100 points up ideally. That would bring is to 1951. However, something tells me it won’t get that far — so if we take the golden ratio of 61.8% and apply it to that 100 points, then that gives us 62 points up from 1851, which would be 1913 – which is reasonable as a target (assuming we break the resistance).
Of those 62 points, we’ve already gotten 40-50 points.
Both of our trades are in positive territory. We made an adjustment today to increase probability without affecting profitability too much – I made this recommend to our subscribers shortly before the open – and then executed on the recommendation shortly afterwards. For some, this adjustment can give you peace of mind knowing that your probability is higher. In case your position size was too large initially, you were able to exit half at break even, and then put on a second trade that is higher probability than the first trade given the market action.
Yesterday, I was expecting a B-wave low towards 1860, but I seemed it would happen overnight — and I didn’t want to get out of our existing position and then re-enter at a worse position in case it rallied from there overnight — and that’s exactly what happened. So sometimes sitting tight can be the best approach. That’s what we did this time.
So both trades that we have are now profitable and on track for expiring at max profit. We don’t care how far up the market goes. Regardless, our max profit would be the same. But it gives peace of mind knowing that our position is on track.
I also pointed out another market (besides the S&P) that may be presenting a good short opportunity – and may be initiating that one soon.