The collision of global markets and social mood

Friday, March 14, 2014

The Possible Shifting Of Retracement Levels

It has been my assumption that only the rally from the March 3rd lows was being retraced since the most recent highs. Today that assumption may be put to the test.

If 1834.44 breaks, it would be an immediate shift to a retracement of the larger structure from the February 5th low, 1737.92.

It would not, however, change my opinion that new highs are still possible. This decline -- in my own opinion based solely on viewing its sub-waves in real time -- is not an impulse. And I have bet money on it (even though it's hedged with a larger UVXY position, good thing).

The point is that if the larger structure is in play, [CORRECTION 12:49 pm EDT: 1827.93 and 1793.56] are the respective 38% and 61.8% Fibonacci targets to be aware of.

The 1845.73 gap was filled and a TRIN buy signal was registered yesterday. I tried to play first by selling a little UVXY and adding a little SPXL. Then I bought SPY 185 calls but wasn't feeling it after the bounce and sold all but 1 contract.

Now I will wait for a larger buy signal should one occur and use a different tranche such as SSO or UPRO.

The Nikkei dumped 3.3% last night and the yen strengthened by almost 1% after BOJ Governor Kuroda said that he "sees no need to adjust monetary policy." The yen has since strengthened further to almost 2%.

I for one do not think Abenomics is working or will ever work. If or when the market agrees, there could be some epic fireworks there. The potential for strengthening in the yen alone (against widespread expectations to the contrary) could further destabilize jittery global markets, Putin or no Putin.

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