The market popped up towards 2258 resistance but fell all the way back down towards 2239 and stayed there for most of the day. At the very end of the day, as we predicted (and traded), market popped up back over 2250 and closed around 2252 ES.
Also, looks like tomorrow is a Fed Day – so expect big moves tomorrow in everything.
The drop from 2258 to 2241 was quite fast. The amount of time spent at 2240 makes me think this could be a B wave – or it could go to 2235 before reversing.
But looks like we got the rally into the close that I expected – so we ended up closing above 2252 ES.
Also, I’ll be putting out some more options training material – discussing in-the-money vs out-of-the-money calls and when they should be used. The text draft is written but still working on the visual diagrams.
The same A-B-1-2-3-4-5 appeared from September into November on a larger time frame. While the pattern isn’t clear on S&P, it’s clearer on Russell.
Back on December 23 – I suggested C – would either be around 2238 or was done at 2251.
It turns out that was the first support – and then there was a bounce with a failed breakout. Because it failed, we then went down to visit 2238 — except it went a bit more than I expected just below 2230.
The count above as A-B-1-2-3-4-5 is what ended up happening. I suppose it’s clearer now in hindsight.
While the S&P did clear 2261 – it turned into a failed breakout – and then went back down below 2240 where the other C blue arrow is pointing towards.
SPY Put Spread
Unfortunately, our put spread was timed wrong on December 30 – and when year-end selling took place then, we lost on our SPY put spread. This is one of the downsides with put spreads. High probability, but if it goes against you, losses can pile up.
We did adjust our put spread the day earlier and judging by today’s action – should be profitable at tomorrow’s Wednesday expiration – that should help cushion some of the loss from the Friday’s put spread.
For GDX, we did manage to pull out a 100% gain on a portion off our position. We realized half of the gains so far for an average of > 75% return and still holding the other half.
I did not expect Silver to make it over 16.3 judging on the completion of 5 waves – yet somehow it made it through and hit the next resistance point. If there’s no follow through, it could turn back down.
While I want to be bullish on gold and silver, the pattern doesn’t seem ideal. I could be wrong and it just blasts up, but I’m somewhat doubtful at the moment. That said, if silver is able to plow through 16.6, we may very well be on our way up.
Sign up to become a member to access to premium videos and you get the insights you need to make more educated trade decisions. And yes, you’ll get join our Whatsapp mobile text alerts for weekly trade recommendations.
|Get Trade Alerts Now|