IRM looks set for a major collapse here having struck a major long term fib and falling out an ending diagonal to form what is probably LPSY. RSI divergence also confirming top.
This will easily see 200 and 500DMA but I think it will go much further and will hold short positions.
Not advice.
ความคิดเห็น
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2 daily failures at this long term and very significant (imo) 1.618 fib.
Dividends on Monday - if SPX opens bearish I would not be surprised if this gaps down.
ความคิดเห็น
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SPX opened bearish, IRM gapped down.😄
ความคิดเห็น
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Big nothing-burger happening here for IRM I think - having a large bounce but with SPX overlaid; can see it is simply moving with the market.
It may get all the way back to that 1.618 fib, but really doesn't matter because trends are about momentum and stability. That 7% gap down into the close was the impulsive move and now dictates the trend This bounce here is all quite corrective.
Also that gap that I suggested will happen before it happened was large players, smart money perhaps even - exiting in large amounts out of hours.
As soon as SPX runs out of gas this should resume the now dominant trend to the downside.
ความคิดเห็น
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This trade is now similar to PFE that had another wave up and in hindsight I think the RSI was a bit too low. In the end it won't make a difference as I have LEAP puts with low IV and I'm fairly sure that long term 1.618 will prove to be the long term phi related pivot.
This last wave up is now overbought on the daily and has hit the 1:0.618 so good chance it will fall soon, also with indexes probably topping soon. But not impossible that it will get up to the 1:1 @59 and strike the upper trendline again. This seems less likely but we'll see.
Either way its only lost opportunity cost as a big crash is coming and should easily land well in the money.
ความคิดเห็น
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Lesson learned with this one is perhaps to have the patience and to expect a final touch of an expanding topping pattern that even may appear to be breaking down.
Indexes are all at their potential reversal points and looking at the chart you can see this move has been running very much in tandem with SPX overlaid. But the difference is IRM has moved on to a higher high while SPX is potentially at a lower high.
However it may take some time for SPX to reverse if it drifts in distribution and in that time IRM can potentially complete a blow off top and move even higher, but its also very possible that selling pressure at the upper trendline will see a reversal.
If SPX does drift in distribution and IRM push on above the trend channel then it will be very overextended I think.
Also looking to RSI I think it may go overbought again I think which would be in favour of hitting the 1:1.
As I said it could break down here but since I have an entry already I'll be more patient. If it does break here then my previous entry is a good one though slightly early and it wont matter too much since I bought a 2024 LEAP put and with this all happening so fast there is plenty of time. Also it is bought with low implied volatility (IV). When the dominant trend really does switch to the downside IV will increase and so will the option price.
I will add a second and last LEAP put around the 1:1 fib but I think if it gets there good chance it will overshoot a bit so I'll be looking to enter another LEAP put at $60
2024 Leap is likely overkill on time premium. Things in this market are moving way too fast for that being needed. Assumption is that April will be positive for the SPY, but not a guarantee as there will likely be fear leading up to May FOMC. For anyone short, I think we all got caught in one way or another by the last two weeks. Mine was in a BRK-B short as it appeared to be at the top of its channel then blasted 10% higher. Still deciding whether I want to try to save that trade to the gap fill a 308 or take the loss. Either way, October puts on IRM should be more than sufficient. This will allow you to catch the weakness in May and September both. Also, with the current technical setup, there almost (90%, never 100% lol) needs to be some sort of semi-major drop in this name in April or May. SPY did claim a higher high, but DIA did not, so the index's are not providing great direction. Technicals also lose some credibility during FOMO/Emotion based rallies over the last two weeks. The biggest surprise to me was the crash in the VIX. It seems that all that volatility was due to the March FOMC which struck me as very odd. While the FED only raised 25 bps, the 10 year was up 65 bps in March, so if 50 bps was the fear, seems the market rally is very suspicious. Also, if you want another very fishy looking short with a good technical bear setup, check out LNTH. The price action is extremely odd. Keep up the good work!
dRends35
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@murrs700, Obviously with options there are many options and strategies. For my setup I see this potentially as a major top so that additional extrinsic value is worth something and comes with lower IV. Interesting points - thanks for the comment.
murrs700
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Even better setup now than on your original date. Massive Bearish divergence on the Weekly and monthly. Eyeing October puts for the open on Monday, albeit whenever I find something this good over the weekend it usually crashes first thing Monday morning before I can get in lol. I usually screw up when I don't scale into a trade, but think I'm going to go a little deep in this one. $40 seems almost a given, and CS (while I do think all anaylsts are garbage) still does have a PT at $20, which would be really nice lol.
dRends35
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@murrs700, Yes I agree and as I said similar to PFE trade i posted it wont make a difference in the end. I might add another LEAP put.