Yesterday I shorted the SPX Futures when the ES was at 3709. Suffice to say my trade drawdown is at 17% right now. Am, I comfortable? Am, I confident? The answer to both is I'm caught off guard and the extent of the rally is obviously not what I was anticipating. Am I nervious....no...I would say more like Hyper Focus.
In times like these I revert to the Rules of Elliott Wave Theory.
Let me back up. As a young analyst, starting out my career and learning Elliott Wave I was taught to memorize the rules. Once the rules were memorized....Trust your count till invalidation. If invalidated, DON'T TRADE UNTIL YOU figure out what you did wrong. Oh and by the way, while your figuring this $h&t out...don't lose a bunch of money. Survive.
So rule No.#27-A (that a euphemism for everything in my world Rule 27-A)
Wave 4's will retrace between .382 of a maximum of .50 of wave 3 but never overlap wave 1 unless in a diagonal. A retracement above 50% of wave 3 is not a wave 4. Your count is wrong.
The below chart shows the retracement levels from the start of wave 3 at the wave 2 top to the low yesterday in the overnight of the futures. Look where we are.
www.tradingview.com/...jz-Micro-10-4-22-ES/
Am I happy....No. Did I Cover my short Oct EOM ES 3950 Short -5....No. I've learned panicking gives in to fear. With a 3950 strike I'm going to give this the maximum room to prove me wrong. My better judgement tells me from experience, this market is going to reverse from here or a somewhat higher level...and make new lows. I'm going to trust my analysis until proven wrong.
Today, between DM's and comments, most were lambasting me. I never claimed to be a fortune teller. Sometimes I am wrong. Am I wrong on this one....I don't think so based on the pattern I have in front me...but time will tell. Did the bears blink? Right now, all I will say is it appears all they did is lay a bull trap. Put/call ratio way down from yesterday...fewer people protected from downside. In my opinion, right where the market wants those people.
Tuition bills in the mail folks....
Best to All,
Chris
In times like these I revert to the Rules of Elliott Wave Theory.
Let me back up. As a young analyst, starting out my career and learning Elliott Wave I was taught to memorize the rules. Once the rules were memorized....Trust your count till invalidation. If invalidated, DON'T TRADE UNTIL YOU figure out what you did wrong. Oh and by the way, while your figuring this $h&t out...don't lose a bunch of money. Survive.
So rule No.#27-A (that a euphemism for everything in my world Rule 27-A)
Wave 4's will retrace between .382 of a maximum of .50 of wave 3 but never overlap wave 1 unless in a diagonal. A retracement above 50% of wave 3 is not a wave 4. Your count is wrong.
The below chart shows the retracement levels from the start of wave 3 at the wave 2 top to the low yesterday in the overnight of the futures. Look where we are.
www.tradingview.com/...jz-Micro-10-4-22-ES/
Am I happy....No. Did I Cover my short Oct EOM ES 3950 Short -5....No. I've learned panicking gives in to fear. With a 3950 strike I'm going to give this the maximum room to prove me wrong. My better judgement tells me from experience, this market is going to reverse from here or a somewhat higher level...and make new lows. I'm going to trust my analysis until proven wrong.
Today, between DM's and comments, most were lambasting me. I never claimed to be a fortune teller. Sometimes I am wrong. Am I wrong on this one....I don't think so based on the pattern I have in front me...but time will tell. Did the bears blink? Right now, all I will say is it appears all they did is lay a bull trap. Put/call ratio way down from yesterday...fewer people protected from downside. In my opinion, right where the market wants those people.
Tuition bills in the mail folks....
Best to All,
Chris
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