Shopping Season

I don’t have a lot of time tonight, so let me proceed directly to tomorrow’s chart:

We satisifed the minimum requirement for a Minor wave 2 retracement but since it’s an expanded flat (see our bible psalm 47:1-34) I’d like to see five waves to the downside – right now it looks like only four. That would get us to the coveted 770 region which is where I’d like to position myself for Minor 3 of Intermediate (A) of Primary {2}. My favorite scenario would be a touch of 790 – 800, followed by a drop to 770. Yeah, we should be so lucky 😉

Of course further downside is not guaranteed and this could have been it as we passed the 23.6% fib line right at the open. Well, I’m sure we’ll know fairly soon after the bell tomorrow – let’s not forget that the larger degree trend is to the upside and that is where we should expect nasty surprises.

Either way – your mission tomorrow, should you choose to accept it, will be to find long candidates for riding the looming Minor wave 3 rocket to the upside. As you know I have some mixed feelings about what lays ahead. On one hand a third wave is usually a fun ride, assuming you actually manage to jump on board, which is often the tricky part. However I also see a lot of resistance looming ahead, thus I’m extremely cautious about picking a target for this one.

But you know what, ladies and leeches – sometimes it’s best to not over think the whole affair. We know the odds at this point and need to play the cards we’ve been dealt. So, I suggest you go through your favorite symbols and find us some oversold candidates (if there are any). I will also consult shortsqueeze.com to see if I can find some stubborn candidates with a high short squeeze factor. Those should pounce nicely should we get a push to the upside.

Finally, if we drop through 770 then there’s not much holding us up until probably the 730 region. I don’t think that is really a high probability but I wanted to throw it out there.

I got really lucky with my GLD puts today as I managed to grab them close to the top. That doesn’t happen too often, especially with precious metal trades. So far so good – it’s important that we do not close above that diagonal going forward. A spike to the upside wouldn’t concern me too much – I’m more concerned with closing prices at this point. Similarly we’ll know pretty soon what’s transpiring here – after one month of whipsaw we’ll either get a release to the upside or downside. Obviously I’m expecting the latter but have no compunction to head for the hills again should we see a close above that ‘fucking diagonal’ – hehe.

It was important for the Dollar to put some distance between its prior low as the probability for further upside is a lot higher now. I mentioned today that I’m counting the retracement as a ‘dirty’ a-b-c, with c representing a Bernanke sponsored spike to the downside. Note that we touched the 38.2% fib line almost exactly – we might see a little pull back but as we are in a third wave now the trajectory should be clearly to the upside going forward – I expect the prior high of 89.44 to be breached in a short order.

That’s it for tonight, my dear rat minions – see you tomorrow morning evil eyed and bushy tailed.