We are looking to start the day by reviewing the $SPX chart and pick up from where we left on our last video and market update, by start looking at $SPX and where it held the 2650 area we talked in the previous video, we have completed 4/5 Wave structure, now we are in process to complete Count 5, for a possible target of 2684 (Conservative Traders can Take Profits) however we can get to 2695 Today, which give us a healthy mechanical structure from technical analysis giving us a bullish setup to project higher.. however we do have some internals that show a top is near by May 11, and booking some profits in this big move is highly advised. – Again if you are not sure, use a percentage profit from invested capital vs possible reward, protect your initial investment by moving your stop to Brake Even or locking some profits.
As we head toward next week, we should get ready to load again on the long side as long as we hold above 2642.5, for new high of 2720-2740. – we are currently breaking out of the wedge, chart will be posted below – as we might be at the end of the 3 month long correction in the market.
To recap on our positions,
On May 8, 2018: We Places a long potions in $SPY and $DIA calls and both Trades were posted, as it reaches to count 5 we will give instructions on trailing our trades.
$ANET we reported on the last video, that we are liking it to the long side and that we planning to place trades to the long side, today we are planning to take profits as it has already met targets. We will likely replace our stocks with calls for higher prices of 263-266.
$NVDA, has extended more than what was projected and not giving anyone a chance to own it ahead of earning. Earning is coming up Tomorrow, we will be holding into earning at this point risking 1% of the account, with possible target of 258-275 area, in any case, $NVDA we like the story and we will be buying on pullbacks.
#BITCOIN, has shown some support at these levels with potential of 20%+ to the upside, we are looking for next target of 12K+ – again price structure is not very clean but it is showing a 3 wave up or ABC.
$AAPL, still strong, we are holding in our core portfolio with short term and long term charts both showing constructive to the upside to targets of 234-248
We will give more detailed trade setups and targets, please check us our Chat Room..
Daily on $SPY did Close above 50MA – is trying to stay firm above the major moving average, we will navigate further on next levels
Seeking Options Team
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Carlos discussed on the posted video earlier this morning, the $SPX levels and where we could be heading today.
So far it has played exactly how we predicted, we are in processes of completing wave 3 and then a pullback is required to complete the 1-5 wave move (for those who follow EW method) before making any bullish counts, so far its just a corrective bounce, and currently we closed back in the wedge, as we couldn’t close above 50MA. On the same token in the chat room Warren in our Futures room has placed a short trade on the $ES_F and possible target 2639, trades were posted via shorting $ES_F or playing the $SPY put trades.
Now we looking at the $QQQs on the other hand have been holding pretty solid up move, and making some good new highs on the intraday basis. They are better set for any bullish play, and we can thank our leaders for that up move in the Nasdaq, Leaders like $AMZN, $FB, $AAPL, $NVDA etc.
Assumption on $QQQ if wave C hold, we can project to 166.93 as a target with having 163.99 as the support, due to the seasonality for a strong up move to even 171.
$FB long trade almost getting ready for another long play once we clear that 174 support holds and go higher to 186 target.
$AMZN, has been holding very good after reporting its ER, and we can potentially look for 1721 target, or perhaps 1678 to be on the conservative side 6% return on the investment.
$ANET reported earnings and its one of the market leaders, and we think it has a nice move up, holding the current level and as it complete the 5 wave up, we could see 1108% win rate if we take the Delta 40 long calls after its reporting its earning. We will place this trade in the room.
$CPA also reporting this week, one of our favorite companies. Its currently working the 5 up and it will likely completed over here, and ready for an up move, so we will place based on the lows and target of 123-126 possible upside targets – always better to wait after earning..
One of the Major movers for the $QQQ’s, $NVDA is going to report this week, and we predict that it can get sold after it reports, as the patter of the Elliot Wave already set for a drop, as a standard move. After the initial down reaction, we could project it makes a new high after with potential targets roughly around 260 to 280+, in Summary don’t short it, wait for the entry around 227, if we don’t get it that’s basically our long targets.
Last week we did $BABA and we projected 190 as a price target, and we bought the 190 calls and currently it’s trading 197.
$TNA is currently getting closer to our target and we have been lightening up since Friday, as at the moment ROI on capital invested is not warranting holding more, although we can extend to 73-75 as potential target – we would like to see a pull back to 70 before joining the long again. With return of 3-4%.
$AAPL, has been a leader and its getting closer to the 1Trillion dollar company, right now its pretty much extended
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U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
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At the moment, it not guaranteed if markets can go higher next week. This time we don’t have a secure pattern. Cyclical analysis is calling for higher into April 30th and Open Interest is projecting higher into the end of this week, May 4th. I like the way daily stochastics are positioned, they will provide strength in case markets decide to follow the open interest projections to the upside.
EW Analysis:
On Tuesday April 24th, based on the .618 extension that was being hit on SPX as shown in the following chart
We, across the board, warned that the excessive confidence of the bears would have to be examined and on Wednesday again, we, in the general Chat Room, warned that markets were to face the 3rd of the 3rd off the 2611.2 lows. So while we maintain that the $SPX should see the 2468 level and potentially lower we have taken an unbiased attitude looking for any evidence that shows our case for lower is wrong, evidence that allows us to capitalize on any potential truncation.
We continue monitoring $AMZN which ideally should hold 1551/1542 in order to continue advancing toward 1721/1770 area. We continue advising you that $AMZN is a must hold company, I have said this to you many times and I expect to be right again while 1540 area holds and retakes highs of this week.
Current $SPX:
The case for higher on $SPX only can be constructed this way shown in the following chart:
another ABC that should take the market higher to 2775 and 2757, the resistance at 2714 is relatively important so reversal from this area should be watched in order to confirm any impulse to the downside.
Immediate pattern has support at 2742 and 2666.1; I will add more if we see one of these levels, at the moment we need more price action with base calling for 2468 but needing a move to 2757 in a C wave up.
QQQ, three up off the lows, needing to hold 160.63 and print one more high in order to confirm five up off the lows that allow us to buy a potential retrace in wave 2.
Enjoy rest of the week and do not forget to not overreact, stay patient and focused.
Previous update was sent on April 8th – Check this article for Full Explanation… the only probable pattern we considered for more upside as shown in following chart:
An ABC structure with ideal target at 2702. With price reversing from that area, we could assume price is now entering into the second phase of the correction.
The second phase of this correction needs to be examined carefully, because the theory justifies the market should visit the 2468 area – shown in chart below:
Certainly could be much lower than that Target of 2648 on $SPX. So we need evidence from the price in order to assume the second phase will play out. We are aware of these risks and we are looking for evidence of this projection.
Other indicators like Open Interest and Cyclical analysis are pointing higher into April 27th and April 30th. Charts attached on this update. Appears to me that if pattern to the downside will play out should be after $AMZN and $FB earnings reports.
Micro charts we are monitoring reflect only three waves down from the last micro high at 2716.8 versus the 2659.2 low – as shown on next chart. So there is nothing bearish that negates the projections of the Open Interest and the Cyclical analysis. Right now 2659.2 should give us a price structure to solidify or to weaken the bearish case.
We have tried to do the best based on our analysis and we will continue to so reminding that PATIENCEis key in order to deal effectively against the dynamics of the market. Market moves fast but this does not necessarily imply you have to move fast, your capacity to monitor and process the information derived from the markets should be fast but your plan must have been designed versus the long end of what you are pursuing.
Initially we will degrade the targets of all our leaders and ETFs from 2.618 to 1.618 in their sub-divisions that we do regularly in our live trading rooms.
Second, we will slowly work on underweight our leaders and we will move capital tactically to $SPX and its leveraged ETFs, limiting purchases from now on only if 2400 area is seen or if some parameters are met on the upside, like taking 2719 resistance in something more than 3 waves up. Most importantly, we should cut exposure on Indexes to only 20-30% of our portfolios once we arrive to the 2950 area and we must have cut most of our non essential longs.
Options: Much more importantly, we will limit option trading on companies; we should only trade options on $SPX/$IWM and $QQQ, trading options on companies from now on should be limited to when we are looking for 1% and 1.618 retraces, you have to adapt and limit the way you make money.
If you want to trade options, make sure you are pointing your target at secure 1% and 1.618 retraces, prepare for some companies to get to exuberant levels, but be aware something that goes up 10% today might/will be down 20% tomorrow, you will lose more money than what you intend to make by following something that goes up only by going up.
We will cut our target for the market to 3100 from 3200 and we should only go after the 3,000 level with limited capital, by the time market hits 2950 our only positions should be on indexes $SPX/$IWM/$QQQ.
Now, assuming 2950 will be seen before 2191, some parameters should be met, starting with the fact that the market should not break under 2373 area.
First approach, under 2587 we continue considering that 2420/2375 are targets, 2327 represents .764 below the standard 1%, this is our primary approach, while we think pullback can go below 2420, but we don’t think it will exceed 2327; if standard pullback is playing out. Traders should consider shorts for as long as market breaks and stay under 2587, and continue shorting when $SPX breaks 2506. Round number for this first approach is 2373.9.
Second approach is a confirmation of first approach, below 2587 market might or might not find support at 2447, acceleration under 2506.3 only confirms 2447 is solid target. Acceleration down under 2447 only confirms our number at 2373 is secure.
Third approach, as shown in chart below, only points to 2422, implying extensions to 2373 might be short lived.
“A VIX future effectively serves as a means reversion indicator in that it tells us what the market expects as a mean”- Adam Warner
Conclusion:
Some new rules have been set, bears are right shorting the market, below 2587 we confirm 2506, below 2506 we confirm 2447, below 2447 we confirm 2373. Everything should be slowly under weighted, except for the indexes, where we can accumulate tactical positions. For example, if $SPX 2719 is taken and $SPX holds above 2687.5 on pullbacks, we can tactically go for 2823. By concentrating our energies on $SPX/$IWM/$QQQ we will avoid the risk of being too spread out.
Rules
Impulsive Waves always divide into 5 waves: Waves 1,2,3,4,& 5; followed by a corrective wave, typically A, B & C.
The waves that are numbered (1,2,3,4,5) are in the direction of the Trend.
The waves that are Lettered (A, B, C ) are against the Trend.
Structure = 5-3-5-3-5 (21) followed by 5-3-5 (13)
Wave 1 could divide into an impulsive 5 wave or a Leading Diagonal.
Wave 3 is always an Impulsive 5 wave and is never the shortest wave.
Waves 5 & C are always 5 waves but it could be an Ending Diagonal.
Wave 2, 4 and B always subdivide in 3 wave corrections.
Wave 2 Never moves beyond origin of Wave 1.
Wave 3 must go beyond Wave 1.
Wave 4 never moves into wave 1 range.
Wave A can be a three wave structure or Leading Diagonal.
Wave 5 often goes beyond Wave 3, if not it is called “Truncation”.
The Chart shows a bull Market. For a Bear Market the chart can be flipped and all the rules remain the same.
The same pattern can be viewed in all time frames: Thick Charts, 1 min, 2 min, 3 min, 5 min, 10 min, 15 min, 30 min, 1 h, 4h, Daily, Weekly, Monthly Charts etc…
Guidelines:
Waves 2 & 4 will almost always Alternate into ZigZags, Flats, or Combos.
Wave 4 can be Flats, Triangles or Combinations
Wave 2 which is usually ZigZag or a ZigZag combination.
Wave 4 Usually Terminates in the same area as the Previous Wave 4 of Wave 3.
Typical Fib counts for Wave 2 is 50%, 61.8% of Wave 1.
Typical Fib Count of Wave 4 is 38.2% or 61.8% of wave 3.
See the charts for other Fibonacci relations.
Often Waves ad-hear to the laws of Channeling:
5 ends around the Chanel line extension of endpoints of 1-3, and
Wave 4 may end at the parallel line point 1-3. (please look at the charts)
Rules
ZigZag is always a 3 wave structure.
Structure = 5-3-5
Wave B never move beyond the start of Wave A.
Wave B is subdivided into a three wave pattern: zigzag, flat, triangle or any combination thereof.
Wave A can be either an Impulsive wave or a Leading Diagonal.
Wave C can subdivide into 5 wave structures: a Diagonal or an Impulse wave.
Guidelines:
Waves A and C connected is usually parallel to the Line connecting the origin of the ZigZag to point B.
Waves A and C usually are Equal in length.
Wave A and C are more often subdivided into an Impulse Wave.
Wave C is always ended beyond Wave A.
Besides Waves A & C usually being equal, the ratios in a correction are less accurate than in an Impulse Waves 1,3 & 5.
See the chart for Typical Fibonacci Retracements.
Glossary
R within links stands for Running
F within links stands for Forced.
(()) double parenthesis stand for macro count from 2009 lows.
As shown on the Chart below that the most probable count for VT, the Vanguard Total World Stock Index ETF. We can see wave (2) was a running flat, beautiful in it’s nature, you don’t need to do anything; the flat plays and develops itself naturally, this is the reason I cordially invite you take it as natural.
We prefer this count over other more tortured lucubration, if we say for example, that this is a 1-2-(1)-(2); we will have an overlap in any subdivision that we force versus the February 2016 decline, it is clear here on chart below
52.31 high of wave (1) versus 50.35 low of the 2016 decline, overlap is clear; now if we gracefully divide the counts as macro ((I))-((II))-((III)), definitely wave ((III)) off the 2009 lows has ran its course at the 2.618 for wave V of macro ((III)), we have an overlap within macro ((III)), so please pay close attention because what I am posting here is important, and if you don’t read carefully we will make a tremendous mistake.
So, here is the important question, based on this chart alone, what is the standard pullback? Well, standard 1% for this chart is 61.01 or a 17% correction from current levels. If this ETF tracks SPX perfectly, this would imply SPX should see the 2190 level. While the chart is beautiful, it’s implications are not. So first let me tell you what I think, I think primarily that bears are being honest and are playing it’s game fair, we, the bulls, are committing a mistake because our time is running out fast, our time to be aggressive on the long side is over gentlemen.
If some upside is left, it should be in the 5th of the V of macro ((III)), so we are playing the last squiggles of something that is ending, like miners that decide to work on a planet too close to a Supernova whose time is over, might explode anytime, we are playing a risky game… risk won’t bode well if we don’t play it with strict rules.
I rather to take this structure on TSLA as an abc (link) with support at 339.12. I have always thought that TSLA has pending issues with the target at 518 and I still don’t understand why that target has not been met. This is the reason we have pressed TSLA on the long side on any decent setup; always looking for that pattern that takes it to that 518, which not necessarily needs to be a perfect 1-2.
So again this abc in red has support at 339.12, once it goes above 360 probabilities for higher will increase, but at the moment, at 356 they are not clear enough. Right now it is at this ROG that comes from August 2017 (link), stochastics is at 91.58 embedded, daily 262 is at 363 and weekly 162 is at 363 too, so based on this any breakout will depend on TSLA’s ability to take and hold above 363 zone.
Monthly 162 is at 376, and 262 monthly is at 424, so based on the big picture versus the squiggles let’s see if our support at 340 area holds or if TSLA has the capacity to take and hold above 363.
Current, March 14th
So, by reading previous paragraphs sent on January 22nd we can note that we have maintained a long term bullish approach on TSLA considering the long term charts; but we are sending this update because we are unusually concerned about one of our leaders. Sometimes our leaders can have a bad quarter or two, but our leaders usually come back in strong manner, erasing losses quickly after they have properly adapted to changing circumstances, but today I read some financial officers are/might be leaving TSLA and that certainly got me concerned, so we will revise all our macro supports.
First looking at (link1) we see there is a potential return of 60% on TSLA with ideal targets at 481and 560, based alone on the total structure of the price. Following is (link2) where there are enough hits to the 1% extension as to consider that any wave iv of any has been fulfilled; this count on link 2 at a minimum projects 450.
Initially we will hold onto our last bull count on this (link3) before considering a reduction in our exposure; here wave 0/1/2 was a type of diagonal and now is working on the subdivision i/ii with support and ideal target at 309.79. Invalidation for this last bullish approach is 294.76, so while 309.79 can be spiked on the downside, our 294.76 should not be broken. By breaking 294.76 immediate target for TSLA should be no other than 266 (link) with Joel’s -162 monthly at 254. Average for these two approaches is 260; that level is certainly the most important spot for TSLA, holding this line our long term counts for 518/568 are still healthy and in good shape.
As to how to trade these probabilities while long shares: Once TSLA breaks 324.08 again tomorrow during regular hours traders should add 310 puts strikes and hold onto them while 344.50 is not taken, if further downside under 310 is seen and only if 294.76 is taken, traders should be more confident about this protection considering that ideally 260 should be seen.
Reducing positions in a 50-30% is good too, waiting for opportunities to reload at 260 area.
We are still long bias and like the stock for higher prices, but ones must trade accordingly..
at the 2.618 for wave V of macro ((III)), we have an overlap within macro ((III)), so please pay close attention because what I am posting here is important, and if you don’t read carefully we will make a tremendous mistake.
is 61.01 or a 17% correction from current levels. If this ETF tracks SPX perfectly, this would imply SPX should see the 2190 level. While the chart is beautiful, it’s implications are not. So first let me tell you what I think, I think primarily that bears are being honest and are playing it’s game fair, we, the bulls, are committing a mistake because our time is running out fast, our time to be aggressive on the long side is over gentlemen.![Next Tesla Move | $TSLA [An Update]](https://seekingoptions.com/wp-content/uploads/2018/03/White-Tesla-Front-4k-HD-Wallpaper-1920x1200-1080x675.jpg)
