by Carlos Narváez | Dec 23, 2016 | RQLAB
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..
by Carlos Narváez | Dec 22, 2016 | RQLAB
Current support for TNA is at 103.97 or .618, chart here (link). That’s all we can say based on EWA right now.
There is no much help from open interest either, PCR is at 2.501, yesterday’s change in open interest was executed into inversion territory CPCR: .627, the short term razzmatazz wave shows a downward path from today, December 22nd, into Wednesday December 28th, so, whoever pushed long trades yesterday is wrong or the razz waves are clearly inverted.
Last big trades reported were mixed:
SPX June 30th (Q) 2,500/2,600 call spreads, 19,600X for $11M buy, executed on December 20th followed by another big trade Jan 25th 225s, puts, size buy at >$2M.
So the big bets are on the long side for now, but they have bought enough time to get paid.
Moore’s 2C-P went up to 82.20, high, but stable with a high outflow of money. We have to watch if yesterday low marked a local bottom.
Market continue being cyclically oversold based on FNG charts.
by Carlos Narváez | Dec 21, 2016 | RQLAB
$TNA
Moore’s 2C-P came down today to 79.50, falling 6.47% while SPX was barely up .39%, this is a nice divergence at the highs, and would strengthen our cautious but bullish approximations, the divergence could indicate we’ll see more sideways consolidation before the market can gain some traction to new highs, is not much but indicates traders are bearish this market while it moves up.
FNG’s cyclical analysis is still looking lower into the 21st, but with cycles so oversold we question how low the market could go before starting to rally.
We would have liked TNA to hit 107.80 or 1% extension to add more certainty to our projections, but as seen on this chart (link) we came too close to .886 retrace; for tomorrow reasonable probable target is 108.50 or 1.382 extension for this overlapping i-ii-iii-iv-v, chart here (link), above 108.50 would suggest 109.07 is solid target to sell the trades; 109.47 is possible but not reasonable probable.
$GE
32.57 is next ideal extension for GE, support should be 31.85, once at 32.57 we should consider 32.47 as support.
$IBM
Two potential counts
First approach: If in 1-2 of 3 for 184.50, support for IBM is at 162.05, chart here (link). Breakout line should be 170.62 with support at 167.83.
Second approach: it’s a blue count, difference is we added a zero and we consider this is macro move with a running flat for wave II, ideal support is 159.08, as seen here (link), breakout extension is 171.72 with potential resistance area at 177.36, the change would be that in this count we should modify target to 195.64.
Looking at the weekly, please notice how 172.47 and 181.11 were huge resistance in the past, chart here (link), so we can take clues from First Approach and consider any pullback that holds 167.83 as buy-able for 181-184.5.
Obviously it would be better to buy standard retraces at 162.05 or 159.08, but in case they don’t materialize we should try to buy according to price action at the breakout and support levels that we mentioned.
$VRX
I will post this chart for VRX here (link) still needs to print five waves up, ideally at 15.33, support for wave iv goes from 14.19 to 14.11. We will assess the retraces after 15.33 is hit to determine how bullish VRX could be.
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by Clarence Oliver | Dec 20, 2016 | RQLAB
Moores’s 2C-P is at 85. Still high, but not the extreme high registered on 12/13/2016, when it hit 96.10. This could support a rally in the markets toward extremes again.
Based on Open Interest, traders continue being bearish for this week, but the rate is more conservative now at 2.824. Readings for EOW4, December 30 expiration, show someone is really long this market, PCR 1.680, into inversion territory, similar to January Expiration series, PCR 1.73 and February Expiration, which is heavily inverted at 1.49.
I will post our current Elliott Wave analysis next, but it’s very speculative, counts are not clear enough . Yesterday we selectively reduced exposure on the long side due to this uncertainty. Nonetheless, we had previously stressed many times that after a successful hit to previous 4.764 extension, the market does not need a clear structure for new highs. TNA went a bit deeper than 101.60, or previous 4.764, to find support at previous 4.618 at 100.50, chart here (link), deeper than projected, so we still have to question if that test is valid.
Right now, we can consider that TNA is working in a c wave higher to 107.93, chart here (link) with a bullish target of 111.74-112.64. What I have labeled as wave 1-2 is subdivided in 3 waves, so could fit better as a-b, chart here (link). But, since we are more than analysts, we are traders, we must set the breakout level for TNA at 106.03, with support at 105.57. Will the price breakout above 107.93 for 111.74? That remains to be seen, so better to start positioning at 106.03 than at the top of a potential C wave at 107.93.
Initial indications are that price is breaking down to 96.79, initial target, and potential for 91.09-89.74 comes once TNA breaks under 101.76, with follow through under 99.95. Extension here (link)
Hope current update clears some doubts,
by Carlos Narváez | Dec 16, 2016 | RQLAB
No much to say for the day. Market managed to break above 102.3 and accelerated to 105.14 in what could be considered a “b” wave top with .618 extension at 105.65, chart here (link). This 105.65 is still ideal target, with next achievable level at 107.53 and still would be a b wave.
Despite apparent strength price was still unable to go above our 106.33
On the downside; once price break 99.95 low reasonable probable targets are 96.32-45.44. Chart here (link)
by Carlos Narváez | Dec 14, 2016 | RQLAB
Our considerations for a bottom in $TNA once 106.97 was taken was wrong, market tried but failed and retested 103.38-102.85 support area as seen here (link) and today’s action open a clear probability for a retest of 101.90 support, chart here (link) very close to previous 4.764 retrace from the following Chart:
On
November 9th, we expressed our reluctance to chase a 5% move on $TNA for 113-114 but established the parameters and stops to enter a long trade in this area 103-102.80. We are proceeding as planned. As an additional note it is worth to mention that a successful retest of previous Fibonacci resistance more often than not leads to a move to next extension and that’s 117.72 for $TNA chart here (
link).
We are not bullish or bearish about this market, we have maintained a successful but neutral approximation. So for tomorrow 101.90 is going to be the line we will be watching to add to our longs. Stops should be considered under 100.31.
Addendum, December 9th, update for $TNA
From 91.76 support TNA managed to climb 19% to yesterday’s highs at 108. We have had 108-114 as targets areas for about one month in our books and we have been trading the long side based on the micro patterns.
The question we ask now is, should we be chasing the last squiggle to 113.46 or 5% more in the upside? The answer depends, ideally we should get a pullback to 102.88-103.38 as seen here (link), in case we have this micro pullback, stop for any trade entered at 103 area should be 100.30 with potential target at 110.45-113.45 and this is a decent risk reward. In any other case we are reluctant to chase a 5% move to the upside, simply because if market starts to correct, standard retraces for support are 87.35-80.42 and this move has been so fast that from here to 98.76 there is only air to support a correction.
For any trade chasing 113.46-114, hard stop should be 106.25
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