5 week low is probably in

Yeah I know. Sucks doesnt it? Holidays in our market..And then the GAP from HELL when we reopen..LOL..I have always wondered why we dont have futures trading after hours. Kinda sucks when all the US markets have derivatives of our indexes and stocks. Kind of dumb if you ask me. But its what we have to work with right now.

Market will always throw us curve balls and bouncers. That is the aim of the market. To separate you from your money.

So looks like a big gap up today. I alluded to this possibility a couple of times in earlier posts. I.E that the 5 week low might be in. This is one reason why I covered shorts on that day I missed the 100 point downswing. Yes it happens. I tend to get these intuitions and signals a few days early. I had a feeling the 5 week low was coming in that day which is why I covered the shorts. What use? :) Still went and entered some shorts past 2 trading days. Nowhere fully as before covering but still around 40-50% short. Still the very good thing here is because of this conflict in my mind, I hedged up nicely..almost too much I think..So today's possible big gap will not injure me..maybe slightly. So I cannot complain.

Updated Hurst Chart -



Ok I mentioned in the last post that it is possible, the 5 week low has already come in. And this chart kind of puts lot of evidence to this view. I earlier thought the 5 week low might come in the Oct 10-14th timeframe as I had posted before. BUT when we talk about lows and cycles we need to give some allowance to the timeframe. So it looks like the 5 week low might have come in on Oct 4th. Ok now coming to possible upside from this low. Remember, this is the last 5 week cycle, so its a bearish cycle. So this is still a bear bounce. Quick and sharp. But it will also quickly roll over. Need to wait for it thought. Price points are 4910-4950 and 5030 levels. One of this areas should provide the rollover and return to downtrend. Before that we have 4860. So lot of points but short covering in atleast first few hours will happen, after which we might get back to the trend.

I think until next week mid. Oct 12th i.e, we might not see major downmoves and will be in a corrective sequence..i.e an ABC move..So A might complete today, B down will come and then maybe a weak C..I feel it might not get above 5030 level for this full corrective move. We shall wait and see.

Another thing what this new evidence does to us is it puts the 80 week low that we were expecting in Nov mid to come a bit early maybe in the Oct end timeframe to Nov 1st timeframe. So need to watch out for that. Either way since we are so close to a major low, caution is advised on bearish positions and we need to start looking for evidence of a more sustainable longer term low very soon.

I will post updates. I have some shorts. I might close them on opening and just keep the hedges I have. This in itself will put me in profit. Have some puts and NF shorts and more than 150% hedges on them because everything was uncertain. So will close/play with them accordingly.

EDITS:

1. 10:00AM Update - Covered all shorts at open. Holding the hedges which are in good profit right now.

2. 11:30AM Update - Covering the hedges..And slowly building into shorts..I might keep some higher hedges just in case. Just remember I think the bounce can go up to the Oct 12th timeframe.


Best,
Lee