This morning around 8:30am – the Fed issued comments that triggered the rally we were looking for.
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With today’s rally over 2440 ES – our SPY calls are up over 100% –on a small $1,000 call that became $2,100 — we cashed out half and are holding the other half.
We’ve been expecting this rally – and it’s taken a lot longer than we expxected.
In fact the big green candle end of June – we thought that was what this rally was — but then the very next day it completed reversed everything and dropped 40 points down to 2400 in one day. Since then, there was a big A-B mountain followed by a 1-2 that took a lot longer than expected.
So with today’s green candle finally happening – we MAY be in the midst of the 3rd wave of our 5th wave up – targeting 2485 ES-2500 ES region.
If so, I believe the rally will end there and pull back below 2300 ES for what might feel like a crash later in the summer.
While today’s rally looks good — so did the one from June 28 – which caught me by surprised with the size of the drop the next day.
I on’t think that will happen this time, but good to be aware of what happened last time.
The previous chart was looking for a continued wave 1 rally towards 2430 ES — which is correct, followed by a pullback just below 2420 ES – which also happened.
The first pullback below 2420 turns out to only have been (a of 2) (see above) — as the market failed a second time at 2430 the next day – which resulted in a pullback yet again to 2410.
When ES hit started bouncing towards 2417 – that’s when we alerted a buy signal – which did well with today’s Fed comments.
The Russell rallied like crazy in the first hour of trading – but then fell back down and could’t move much. I have it labeled as a wave 4 down – but I think it’s also possible the drop was a wave 2 – and what we might get next is wave 3 — which could be a short wave 3 — OR — we could have that final 5th wave followed by a reversal.
Nasdaq is nearing the 5800 region- – from there I expect some pullback towards 5750 tomorrow.
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