Yesterday blew up the particular wedge that I was speculating on but there may be a larger one setting up with lower then higher targets. Such is the paradoxical nature of the markets.
I puked some SPY calls right at the low yesterday when the scenario suddenly changed and I started thinking about a much deeper Fibonacci retracement. It was a bad move and I missed a great rally. I also have a tranche of SPY calls higher (meaning underwater) that is hedging UVXY which is up huge. Sometimes that's just business.
I would like to see the S&P either confirm the overnight futures action by making a shallow new low today, or I'd like to see it create a three-wave corrective structure by getting above 1870.57 without a new low.
Either one of these moves will determine my strategy for the next few days.
Dennis Gartman: ‘Scared’ and getting out of stocks for now
Marketwatch is quoting Dennis Gartman, a noted trend follower, as having been "scared" by the market on Friday.
Friday was simply Turtle Soup, otherwise known as a false breakout. This trade has been around since 1992 when the proteges of trading legend Richard Dennis began to sell their trading rules to make up for steep losses in the markets. As more traders began to learn the Turtle methods, more and more began to fade the Turtles.
Now that Gartman is getting out of his stock positions, it may add credence to the scenario of a larger wedge in play. Here's a quick napkin drawing of it from yesterday.
Yet if 1839.57 holds, this one could be in play.
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