This is based on the same action you've seen in market updates all day. I'm going with a small, speculative positive of about 1/3rd the normal full size in July (standard) $115 calls which expire next Friday, I always like buying 3x more time than I think I'll need.
I may add to the position, I'll show you why I would add and why for now, the position is speculative in size.
IWM 1 min, as suspected earlier today, the negative divegrence that was very small intraday gained some size and has been enough to "steer" the market back down, this is where the "larger base" comes in and this is when I would add to the position,
but for that to happen I think first price will have to be around today's intraday lows and we need proof in the form of 3C going to positive divergences as prices pulls back, we are not seeing that yet, just in line at the green arrow.
The Q's 1 min are in a similar situation, but looking a bit better here, I went with the IWM because it looks like it has a better chance of building a larger base and because small caps have taken the worst beating this week thus far.
QQQ 5 min positive is what I need to see to take a position, a divergence out to at least the 5 min chart where we see heavier underlying money flow.
The SPY intraday is much like the IWM, still waiting on it to start going positive in to a pullback,
otherwise, today's divegrence may have only been to hold price from deeper declines as we were headed that way this morning before the divergences formed.
In other words, if we don't get anything else positive, the positive divegrence from earlier may have already been spent in the bounce off intraday lows. This is why the position is so speculative in size
until/unless it proves my original thesis, that it is building a larger "W" base rather than today's "U" shaped base.
The SPY is improving, but I still prefer the IWM.
No comments:
Post a Comment