This week we locked in close to $1,000 on the Nasdaq QQQ puts – a result of capturing a 50 point drop in the Nasdaq futures.
We are down a few hundred on the SPY puts from the close – as much as I would like to see downside, the charts are saying otherwise. And the clues didn’t come until the close on Friday — It looks like we haven’t topped yet – especially if 2503 resistance breaks.
Ideally on the bear side, I would like to see 2480 ES tested followed by a bounce to 2489 ES. However, it looks like the market doesn’t want to drop just yet.
If 2503 ES resistance gets taken out, this would point towards 2510 ES. If that overnight drop to 2492 is really all we get ad nothing more, then this orange count would have to be in play.
The previous chart had us going into 2500 – and even higher towards 2506 ES – though it stayed above 2500 ES for several days.
And the only 4th wave drop was the overnight drop we got between Thursday night and Friday night – and even that drop was only to 2492 ES – and that was quickly recovered by the time the markets actually opened.
So the dips have been almost nonexistent.
We bought QQQ puts right at the market open on September 20 when the NQ futures were at 5890 NQ – and caught the wave 1 down – exiting at 5940 NQ — a 50 point drop.
We covered half initiially – then covered the other half at the same level the next day in the 3rd wave down.
I was expecting more downside – but based on Friday’s action, the length of time it took to do all these squiggles, and the fact that we have an a-b-1-2-3-4-5 to the downside – I think the lows won’t be breached – and we could be heading up in the next two days.
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