There are various times I've posted about squeeze risk and took positions for it. I think if that's going to happen the 3900 level will hold. And I think this failed the other week. We're just in a distraction move before a break. There are various things important about the 3900 level.
It's the 38.2 fib of the 2020 low rally. This is by far the place where a blow-off top starting is most likely (As per Elliot theory). If the 38.2 is breaking usually we reject from around the 23 (Double top/little spike out moves common). We've done that once here. And headed back to the 32.8 fib. I think this will be the critical level. Bulls have failed under there. Could still take a couple weeks to break here. More on retracement fibs and strategy for break here. https://www.reddit.com/r/BeatTheBear/comments/v9ly5h/simple_strategy_for_dealing_with_bear_break_to/
A top usually comes in after a 30% retrace that goes parabolic, with few pullbacks, into the 161 - 220 fibs. Most typically this spike out is about 20 - 25% of the last high. Also, often into the final swing off the 30% pullback the gain is usually about 80 - 100%. The short squeeze theory bets on this happening, but all of these checkmarks have clearly hit from the start of 2020 to today.
It's not a risk bears can ignore - but I think it's a setup that totally fails if we get under 3800. Maximum risk for it is right now. 3900. This would be where we'd expect a hold in a bull trend. If we break this level first time or bounce back to around 4100 - 4175 zone and then come back to the 3900, I think that will then break and a breaking of this level will produce a very strong move. Overall trend of not less than 20% from the 4100 - 4175 zone in total and probably large chunks of that being covered in days.
It's possible. I think about it a lot and have various plans ready to go if it happens, but I feel more and more it's unlikely. 3900 hold and it over 4600 I think would make it very likely.
Since time of writing, we've rejected the 161 fib and are down 12% or so.
Now testing the 127 fib. I think a breaking of this may set up a waterfall event to 3300. https://holeyprofitnewsletter.substack.com/p/big-waterfall-event-may-come
Hi is it possible that the decline from 4817 - 3850 is building up another steeper 161 high at 5400 ?
'tis the thing that chills me to my beary bones.
There are various times I've posted about squeeze risk and took positions for it. I think if that's going to happen the 3900 level will hold. And I think this failed the other week. We're just in a distraction move before a break. There are various things important about the 3900 level.
It's the 161 extension from the head and shoulders. This is usually the first target level for this trade. This is why I went long the first run into 3900. https://www.tradingview.com/chart/SPX/h82MskA6-Prepping-to-do-bullish-things-at-3900
It's the 38.2 fib of the 2020 low rally. This is by far the place where a blow-off top starting is most likely (As per Elliot theory). If the 38.2 is breaking usually we reject from around the 23 (Double top/little spike out moves common). We've done that once here. And headed back to the 32.8 fib. I think this will be the critical level. Bulls have failed under there. Could still take a couple weeks to break here. More on retracement fibs and strategy for break here. https://www.reddit.com/r/BeatTheBear/comments/v9ly5h/simple_strategy_for_dealing_with_bear_break_to/
A top usually comes in after a 30% retrace that goes parabolic, with few pullbacks, into the 161 - 220 fibs. Most typically this spike out is about 20 - 25% of the last high. Also, often into the final swing off the 30% pullback the gain is usually about 80 - 100%. The short squeeze theory bets on this happening, but all of these checkmarks have clearly hit from the start of 2020 to today.
It's not a risk bears can ignore - but I think it's a setup that totally fails if we get under 3800. Maximum risk for it is right now. 3900. This would be where we'd expect a hold in a bull trend. If we break this level first time or bounce back to around 4100 - 4175 zone and then come back to the 3900, I think that will then break and a breaking of this level will produce a very strong move. Overall trend of not less than 20% from the 4100 - 4175 zone in total and probably large chunks of that being covered in days.
It's possible. I think about it a lot and have various plans ready to go if it happens, but I feel more and more it's unlikely. 3900 hold and it over 4600 I think would make it very likely.
All comes down to the 3900 price, I think.
Thanks heaps , 3900 is also 2.6 extension of last up leg in the 5 wave up from 3850
And around 360 320 fib of the 2000 -2008 range. https://www.tradingview.com/chart/SPX/yHheD3iy-SPX-at-423-extension-of-2000-2008/
TA paints a perfect storm, tbh. Time will tell if that matters.