We assumed market was to bottom at the end of the session of Tuesday January 31st setting up to rally on Wednesday February 1st with AAPL; so far that happened and even I had not time to write the regular update due we were focusing on AAPL’s earnings I did mention through our communication channels that was very likely that TNA could hit 103.64 on Wednesday but we did not expect the gap to hold. Based on this, on Wednesday we did some movements on our TNA position, selling a the highs, which allowed us to repurchase a 1.42% position on this trading ETF at 101.50. [We sold this last position at close on Friday]
Now, I want to clarify that until the close of Tuesday, 31st based on PCR and the shape of the short term razzmatazz wave, which was inverted at 3.410, we did not expect market to sustain an uptrend, but that on same Tuesday’s night Joel Whithun reported PCR fell to 3.229, meaning the weekend update for higher was on track again. I wanted to clear this up, because we adjust our trading as soon as the price and indicators set new expectations.
Now we can move to this week projections
OI: The shape of the short term razzmatazz wave continue to show a low into February 22nd, but morphed a bit and now is showing a high consolidation all this week into February 10th, then a hard selloff. Opposing to this; the long term razz is showing higher highs into February expiration or February 17th; but PCR for this week is at 4.471 and the change was executed at 8.579 with 78,404 calls expiring versus 350,566 puts, this leaves questioning, what is the contrary to flat?
Moores’ 2C-P is 85.74
Cyclical analysis: Is showing a shallow correction into the 14th-15th, February, then continous upside into March.
Using Elliott Wave, will be enough to say that 104.47 is support, as seen here (link), price can go to 107.76 before retesting it, or test it before heading to 112, which is ideal target.
Monday January 30th – Updates
The short term razzmatazz wave is showing a low int tomorrow Tuesday, January 31st. Then a rebound into February 2nd – 4th. At the same time PCR expiring tomorrow is into standard territory at 2.077; meaning the call for lows into January 30th and 3[1]st is valid.
After this rebound on indexes that is projected for February 2nd-4th, both, and this is important, short term and long term razzmatazz wave are pointing lower into mids of February, so based on open interest we can’t make a bullish case for the market. We must adjust our expectations and assume a retrace will be seen for as long as SPX is under 2311 SPX. I would not trade a breakout above 2311 based on current internals, might be short lived.
Moores’ 2C-P is at 96.08, adding confidence to our call for lower lows.
Tuesday January 31st – Updates
The short term razzmatazz wave is showing a low into today then a rebound, that call is valid based on open interest for today with a PCR of 2.082.
Open interest for this Friday, February 3rd, is into inversion territory, at 3.410; we have 74,677 calls versus 254,637 puts, the change was executed at 8.974 that is very high. If we had to use OI to make a call, this would be a continuous bearish scenario for the market, at least until this Friday. Reason we need a clear structure on the upside to trade the long side of the indexes.
