Thurs/Fri/ and today morning rally in my mind is just a retracement of the plummet from 2019-1926 and short term oversold conditions. I think the risk-reward for bears sets up pretty well here...
Dow retraced about 61.8%, S&P/NASDAQ a little more than 50% of the down move... The risk is to the down side with initial targets of 1810-1850 and 1650-1730 with a stop above 1987. The next move down should take out the 200 DMA and August lows. Also, Wave-3 of Minor Wave III might be just unfolding, the most powerful move of a downtrend...
20 point risk for a potential 120-300 point gain!
If we use EWT for the short-term,
Wave-1 = 2019-1926
Wave-2 = 1926-1978
Wave-3 = End of Wave 2 to minimum 1.61% of Wave-1
On a separate note, if the above starts to play this is just the beginning of a much massive decline that would unleash a nasty BEAR market that can take S&P to 400 level
It is way over done here and today is setting up to be an inside day. Expect a outside reversal day from these oversold conditions. Initial price target is $9
One day move doesn't make a trend. Too many traders got short after Russell broke down yesterday and scrambled to cover! Unless you take out Monday's highs, this move is just a Fib retracement and the downtrend will continue... At least volume & volatility are back, good for Bulls & Bears :)
Like I said yesterday, You're looking at the most powerful phase of the decline and i don't think the market will retrace much during this down draft. The Russell broke through the 1082 support that has held since Feb-14. Now this opens the door wide open for 1000 as the next target and further targets are 940 and 865 (If this turns out be much uglier)
Just to be clear... targets below 1775 does include the completion of Minor Wave-III (Which assumes a 5 wave move donw)
PBR heading to $10 regardless of the Ebola headline risk. The only thing to change that would be Dilma losing the election.
This post is also dedicated to "MaxActionJunkie" and some other retail investors who presumed that stocks go straight to the moon without retracements,
I've been trying to explain to you guys for weeks now that stocks trade 2/3rd of the time based on sentiment and technicals drive the sentiment... Well at least for the machines. Some found it funny, amusing and even ridiculous when I said this is headed to lower 30's first before any upside. Well, here we are and it is no coincidence or luck. If you want to stay in this game then better understand the machine speak (TA) cuz they handle 80% of the trading. Also, understand WSA are not here to guide the retail, but to help their big clients make $$$$. Don't fall for their upgrades at the top and down grades at the bottom.
Anyways, my initial price target of $32 (today's low was 32.21) has been met and I closed out all my PUTs today for very nice gain. If the broader market stabilizes and today's lows hold (At least for now) then you can take a shot at the long side (Just for a trade and it does not change my thesis that steel is headed much lower on the longer run)
These are the retracement levels:
23.6% = 35.5 (Will def. hit this level)
38.2% = 37.87 (Will prob. make it here)
50% = 39.53 (If 50 DMA is broken then it will get here)
61.8% = 41.18 (With earnings can get here)
78.6% = 43.23 (The most upside possible before the resumption of the primary down trend)
Again, if the broader market falters or even worse break the 200 DMA starts it's free fall X would plummet to mid 20's. But, i give a 70% chance for bounce first...
VIX closing at the highs, Selling intensity too strong for any kinda immediate bottom. Looks like 1850 (Flat for the year is now in the cards). I would still expect some sort of bounce, the intensity and the extent will determine the lower high that would be the next major short-able bounce for years to come. Hopefully, this down draft does not lead to a market crash and we get another opportunity to go completely short for the 70%-80% decline that is about to follow in this final phase of the secular bear!
from the lower side. China PMI below expectations, a perfect recipe for a short and I'm short 20K shares @ 16.75. Own some weekly calls as a hedge.
If you're indeed trying to play the global economic recovery play... then there are so many other stocks that will perform much better. Look at the beaten down coal & iron-ore names. Steel is in complete disconnect with every thing else cuz WS was long... Now that tide is turning. Precisely why i picked this sector and this stock in particular to play the downside... The ting about MOMO is it works both ways. A fews days ago you debated me that this would never fall to to $40 and here we are... technical do matter big time and no real support until $37'ish now. You do know that a stock like X can just gap down 10% and there goes your stop-loss...
I'm short the steel space via X (The stock has moved from $22.5-$46.5) in 3 months on global demand for steel. What a joke? That rising wedge is getting real hard to defend and a break down is imminent
"Do you really believe that the shorts weren't wrong on this? "
I'm sure they were wrong from $196 to $17 (In 2008-09) and then from ($75-$16) and then again from ($32-$15)... See a pattern here... Lower highs, lower lows X still in a long term down trend and bear market (As are the whole commodity complex)
Futures indicate the Wave-III might already be unfolding... If that plays out then expect a precipitous fall that has not been seen since 2011-2012 sell-offs. I don't think there will even be a breather until the 200 DMA
Production increases... Demand drops... Guess what happens to prices and margins?
SLX is trading around it's 52 weeks lows... That means that AKS and X should be getting their 52 weeks lows as well! but the issue is that they are still 75% above it. So a lot of room to fall further
Still handing by the thread on the Ichimoku cloud support between 35.5-35.8, if that breaks then 50% retracement is @ 34.75, if broken then free fall to between $31-$32