$IWM Primary Wave 5 is in, Cycle Wave 2 here we come

If primary wave 5 = .618 of wave 1 + wave 3, then primary wave 5 was in today at $193.80. This top coincides with: (1) a bearish ascending wedge; (2) overthrow of 20 year channel; (3) bearish RSI divergence; (4) declining volume; (5) bearish MCAD cross and divergence; (6) all time highs; and (7) "real" economy that does not justify $IWM all time highs.

Just one man's opinion, but I think this ship is going down fast. I've been averaging in 6/2021 long puts for a couple of weeks. Today might be the last day I add to my position before the fall.

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$IWM fell out of its wedge. We might see a backtest before the fall, which will be a good opportunity to add more puts. Meanwhile, big tech names are up. The value rotation is unwinding. Whether the unwind sweeps through tech in goes straight into dollars (most bearish scenario) remains to be seen.

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Closed today's gap down at 194.81. All the remaining gaps are due south.

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$IWM 15 minute. Price fell out of an ascending wedge bear flag after piercing the 0.618 for a possible wave 2 of an impulse down.

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Monitoring this closely. $IWM continues to amaze me. Quite possible the break below the ascending wedge was a "bear trap" throw-under, in which case $IWM will break out the top of that wedge and go higher. I think that's the less likely scenario, but I'm watching closely as I am deeply invested in long dated $IWM puts.

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Upper rail of the ascending wedge provided resistance. I redrew the lower line of the wedge to bring the recent drop inside. Still hopeful this thing fades. But I need a strong leg down and soon if I'm going to hang onto this trade.

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We've broken below the ascending wedge. May see a backtest, but this validates my decision to add some more 6/2021 long $150 puts yesterday in the $3.00 range. Not sure what the catalyst here is. Sell stimulus news? Rotate back into FAANG? But the price action justifies a major correction.

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Rounding top bear flag on the 5 minute, and back down we go!

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Backtest. Lower wedge line holding up so far...

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Beautiful backtest and a rejection right at the 0.50 fib. Hoping to a nice long wave 3 down from here. Added more long 6/2021 $150 puts yesterday. Currently my largest holding, averaged in at $3.49.

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Love it when a plan comes together. Puts are up 7%, but I'm holding these for a bit. This fat pig has a lot more dieting to do, methinks.