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An Epic Bounce....or another dud?


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#31 dTraderB

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Posted 04 January 2019 - 02:53 PM

As of yesterday Rydex Ratio was at a 3 year high ( meaning people are out of the market and in bear funds and cash )  This is normally a push for the market to go higher...   Given the current scenario with the economy, I would say the correction is over, there are a lot of money of the sidelines that need to come into the market and higher prices to make the market overbought.

 

Given the current economic conditions the market is properly valued...   About 8% higher we will become mildly overbought and 20% higher extremely overbought...  

 

I do think we go higher from her..

 

qqqqtrdr

 

Yeah, rally from a positions of extreme negative sentiment 7 with many anxious buyers waiting for an opportunity to buy

10% from SPX 2450 takes us to about 2700, that's about the highest target for this rally. It could reach there in about 10 trading days. 

 

BUT, there the market has been beaten down, big losses for many, skittish traders, and major underlying issues that have to be resolved.



#32 dTraderB

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Posted 04 January 2019 - 02:55 PM

President Trump should wrap up that Press Conference and go to Mar Lago for a rest, maybe until next Friday, no media events. 

 

Market does not take too kindly to these press things at the WH


Edited by dTraderB, 04 January 2019 - 02:55 PM.


#33 dTraderB

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Posted 04 January 2019 - 03:24 PM

2 successive red hourly ES candles... a third one, the last of the week, is bearish.

 



#34 cycletimer

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Posted 04 January 2019 - 07:45 PM

Closed all SPY & QQQ calls 

 

Looking for the next option trade...

Sell some cash-covered puts on next pullback, You'll be rewarded more than buying calls.  I've been short puts on MDY, after today they're WAY out of the money.  



#35 cycletimer

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Posted 04 January 2019 - 07:51 PM

As of yesterday Rydex Ratio was at a 3 year high ( meaning people are out of the market and in bear funds and cash )  This is normally a push for the market to go higher...   Given the current scenario with the economy, I would say the correction is over, there are a lot of money of the sidelines that need to come into the market and higher prices to make the market overbought.

 

Given the current economic conditions the market is properly valued...   About 8% higher we will become mildly overbought and 20% higher extremely overbought...  

 

I do think we go higher from her..

 

qqqqtrdr

Amen QQQQ, I'm in same camp.  I admit to being a wee bit early (I usually am!) but I'm 100% Long, fully invested and I believe the low is in for awhile.  We should be 8-10% higher in short order.  2800-2900 by March is the path I see.