Last week we had a very parabolic move to the upside, I showed in a few posts how easy it is to recognize a short squeeze, most of that was short squeeze based, not risk/demand.
In any case, Friday I said I was looking for the unwinding of what I view as a proportional head fake move above the 3 month range in the SPX, however, the normal reversal process that tends to have a wider umbrella like top looks to me to be a low probability. I could make the argument that the short squeeze late last week was the "Chimney" part of an "Igloo/Chimney " top or reversal process, with that process starting as price crossed SPX $1900, either way the charts are really falling apart quickly and as I always say I don't trust parabolic moves like we saw last week because they tend to end as badly as they begin, just in the opposite direction. This is why I'm throwing more trade ideas out there quickly today.
5 years ago
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