Butterfly harmonic pattern will likely take place here IMO and we have a ways to go down before I would buy again.
Trade active:
Just for context in a trade like this you would want to see a measured move from X to A and those would be your FIB levels for the 0.5 where you should see a strong impulse off that low into the C area then from the C to D it would be more violent to the downside and not violate the X area but actually touch the 886 from C to D however it could go lower but before you went long in this trade you would want to see a break above this level before you added to the long side. My area of going back long into this market is at the 886 or 7817 on the NDQ.
X to A you have the wing set up and so you would want to see B hold (which it did) at the 0.5 and from the 0.5 you would see it generally top out at the 886 although in my diagram I did add both the 786 and 886. The X portion is cut off but its the December 2018 low of 5883.
So I am basically calling a top at this point and (I know doing that is dumb) but this would be invalidated if we challenged the highs or break hard above 16k.
And I did build a short position because volatility is low and PUTS are cheap.
I apologize for not putting the context in the original post.
X to A you have the wing set up and so you would want to see B hold (which it did) at the 0.5 and from the 0.5 you would see it generally top out at the 886 although in my diagram I did add both the 786 and 886. The X portion is cut off but its the December 2018 low of 5883.
So I am basically calling a top at this point and (I know doing that is dumb) but this would be invalidated if we challenged the highs or break hard above 16k.
And I did build a short position because volatility is low and PUTS are cheap.
I apologize for not putting the context in the original post.
Comment:
You will need an event for this type of move to happen, possible events that could make it head lower. Upcoming OPEX Friday, Tech earnings,FOMC July 26
Comment:
We are at RSI extremes at the weekly, which was seen at other steep pull backs.
Comment:
So far my PUTS are printing the move has been violent. The trade remains active for me and I will be curious to see what NVIDIA does on their earnings because they were very ambitious.
Comment:
We remain within a consolidation range, being a bull in this area is hard because there has not been a confirmation to the upside. In my opinion with all the bad news coming out and failing to take that high out it is hard to enter a long position so my bias remains short here.