On this update monthly chart for $RVX (link) you will notice second horizontal line is providing the support we expected for the volatility on $RUT, so current price action is not surprising and as we have been considering this is an area to watch carefully and we have been reducing positions in our stocks.
The question we ask ourselves is, is this the start of a regular decline or the start of something uglier?
Based on Elliot Waves, this decline has been very corrective, this is pullbacks have occurred in three waves, so there is nothing bearish to talk about yet and even our current expectations are that $TNA should see lower levels while it does not take 107.54 on the upside, we should expect 97.58 -equivalent to 1% extension- hold and correction finishes there.
There is always a possibility for 91.36-89.90 as seen on this chart here (link), but at the moment that deeper scenario is not probable.
2C-P is at 83.50, still high, if we could get the 60 area that should be better.
It is weird that market declines into these dates. Retail looks to be in charge, according to Leo Valencia, the renowned volatility expert from Gamma Optimizer. That is contrary to what big money is doing, Mikey reported largest fresh bet of the day was $IWM Feb $136 calls bought 5,000X at $3.50 and 2,500X at $3.67, for $2.75M.
We have our macro levels to watch on TNA and the micro we could expect a bounce into today, that should be corrective in nature. Setup is here (link), sto at 101.13 targets for 104.15 and 105.61.
$RVX, Recap from November 26th
Additionally, looking at $RVX or volatility for Russell, chart here (link) this has arrived to the lower end of the channel, meaning that at least a bounce in volatility should be expected, on a monthly chart (link), you will notice red lines support were no broken even under the pressure of iii of 3 and v of 3, so we have serious doubts the same levels will be broken under the current price action, a break under those levels, where alerts have been set would be a real indication we are facing the epicenter of primary wave 3, as unkie Don noted on Thursday November 24th.
Merry Christmas and Happy Holidays..
