The 8:30am Friday Jobs number pushed the markets up after slumping earlier in the week.
Even the night before, it looked like the markets didn’t feel so good – yet over night – starting just before midnight between Thursday night into Friday morning, the markets reversed. After falling towards 2270 – it recovered its losses from earlier in the day and started consolidating into the jobs number.
Once the number came out better than expected at 8:30am, the markets pushed higher and consolidated high for the rest of the day
While the Russell (IWM) tested our short strike, our bet was correct and we realized $1,200 in max profit on Feb 3 expiration this past Friday.
Our bet was that IWM would close on Friday above 133.5 – and it closed closer to 137 – so this was a relatively high probability trade with lots of room for cushion just in case.
At expiration, we didn’t have to do anything to close out the position. Simply letting them expire worthless – we were able to collect the max profit without paying additional commission for executing the trade.
We also have a few other positions we are still holding – all are in the green and doing well so far.
The market appeared to break out end of January on January 24 into 25 — but the market erased the entire rally over the weekend and into Monday and Tuesday of this past week.
We effectively came back down and retested the breakout zone in the 2263-2265 ES zone multiple times – as indicated in blue below.
In fact, on Thursday Feb 2 – we cormed a clear A-B Mountain consolidation pattern in all major indices. Notice how this pattern takes on slightly different shapes.
With the Russell in the blue circle below – we made a lower b at 1350 – compared to the prior overnight low at 1352.
Whereas the Nasdaq had a relatively flat A-B Mountain from 5120 up towards 5155 and then back down to 5120.
The Nasdaq is hovering just around new highs once again. The blue circle shows the A-B Mountain that formed inline with that of the other indices.
The previous chart predicted the setup for a i-ii-iii — but it turns out the wave ii wasn’t quite doone yet.
Instead, what we saw was just “a of ii” — which would man a remaining “b of ii up” and “c of ii” down – before completing wave ii.
So wave ii down ended up coming down towards 2264 – and even then the wave iii didn’t begin quite yet – as we had an A-B Mountain consolidation pattern that happened the day before the Friday jobs number.
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