Disclaimer

I'm not a financial advisor nor a broker/dealer. I neither provide financial advice, nor make investment recommendations. Nothing you read on this website constitutes a solicitation, recommendation, or promotion of any particular security, transaction, or investment.
I may at times discuss trades or trade setups, but this is meant to be purely a discussion point for entertainment and educational purposes only.

Wednesday, October 19, 2011

October 19th Update

SPY

I'm now short the SPY.  BEARISH SPY 121/118 VERTICAL PUT.
My decision to go short is based on three things.
  1. First the put/call ratio for equities is down to an important relative level (see PPO indicator on the left graph). 
  2. Second, I can potentially count five completed waves of minuette degree.  
  3. My wave momentum indicator is big time divergent with price.  Notice the high occurred around where I have the wave (iii) label on the price chart. 
If the next corrective move lower is part of minute wave ((b)), then we'll likely get a 50% or 61.8% retracement of ((a)).  I favor this scenario, since it sets things up for a continued rally into year end.


Posted by Waverunner (FractalTrader) at 10:53 AM

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Notation


Wave DegreeMotiveCorrective
Grand Supercycle((I)) ((II)) ((III)) ((IV)) ((V))((a)) ((b)) ((c))
Supercycle(I) (II) (III) (IV) (V)(a) (b) (c)
CycleI II III IV Va b c
Primary((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))
Intermediate(1) (2) (3) (4) (5)(A) (B) (C)
Minor1 2 3 4 5A B C
Minute((i)) ((ii)) ((iii)) ((iv)) ((v))((a)) ((b)) ((c))
Minuette(i) (ii) (iii) (iv) (v)(a) (b) (c)
Subminuettei ii iii iv va b c
Micro((1)) ((2)) ((3)) ((4)) ((5))((A)) ((B)) ((C))