The case for strong rally improves.
Optimal bull levels and where they fail (And it's probably a short)
A move very similar to our primary trade plan posted the day before the CPI has occurred.
CPI thoughts and trade plan - by HoleyProfit (substack.com)
The bull case is now technically very strong. Only way to make a bear case here using the rules I do would be speculating that there had been big false breakouts. While it’s highly likely there will these before the mega drops - betting all of them are is very painful and when those are happening they do not usually structure themselves like this.
Blow-off tops do not have lots of pullbacks. They are not incredibly difficult longs where bulls get rugged every time they enter on small timeframes. It’s the inverse properties that make them a blow-off top. Everyone can easily make money buying anywhere for the brief time it’s happening.
This is not happening. The move is forming in a series of waves with lots of pullbacks and false breakouts. Overall it been acting much like one would expect in the bullish Elliot Wave structure.
To show how consistent price action is with the norms of the Elliot structure here are various real time forecast of this move using an assumption we were forming waves.
Forecast of drop here the high.
Pending longs 4070 for CME_MINI:ES1! by holeyprofit — TradingView
Forecast of rally and drop while close to the lows.
Is this bullish Elliot waves? for SP:SPX by holeyprofit — TradingView
Forecast of high of rally and start of pullback.
That'd be wave 1 if this was Elliot, I think. for SP:SPX by holeyprofit — TradingView
Forecast of recent low and rally.
That would have been wave 2 if Elliot. for SP:SPX by holeyprofit — TradingView
Looking at the original forecast at the high and the real price move, that’s quite compelling.
For what it’s worth, I “Feel like” the market should go down. It seems inevitable it’s going down hard sooner or later. I’ve spent inordinate amounts of time explaining my research into why I think it will go down and everything in the real world seems poised towards that.
But opinions are opinions and strategies are strategies - Elliot’s strategy is better than my opinion. And that’s a very nice expression of Elliot waves. The only honest bear case that can be made is if there’s a truncation of this that would result in an astonishing downtrend (Failed EWs tend to be vicious).
The odds of this are low. We’d have to start seeing important breaks. At this point anything around the highlight is fair game for a low. Getting under the blue line would trigger a first break.
Under the blue line is the obvious stop out for bulls. Even if the trend will hold and it’s just a retracement, there’s usually a better chance to buy later. If the market holds above the highlight and makes a new high this is a really strong setup for bulls (With stops under blue line).
Minimum target on the bull move if this holds inside the last rally would be 4250.
Clear failure of this setup if we break under 4040. Stops there.
Now we’ll get into trade plans for the bull move and some continencies for bear breaks. Bear breaks would be tricky from the perspective of my strategies but probably easy enough “Short the retest” trades. If the bull follows the Elliot rules, we can make a lot of profit.
Trades are easily 1:8 RR from optimal buy level (Which there’s a fair chance of getting) and being in a strong uptrend gives us multiple spots we can add to positions.
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