How About That Ledge?

I made the following chart where I superimposed the old ledge I’ve being going on about all day:

What this level represents, in layman’s terms, is an area that traded poorly. It was left behind but not forgotten. Today we revisited it and found buyers. However, they only reacted to the prices, and we have not seen any form of initiative buying so far.

Instead we formed balance (seen on far right of above image). Balance suggests the market is accepting these lower prices. Before we can become constructive again, we need to leave this area and then use it like a stepping stone to begin marching the auction higher.

This morning NASDAQ TRIN went absolutely insane and registered a reading around 135. I went back on 6 years of data and didn’t see another instance nearly this extreme. From my observations, when TRIN blows way out you are seeing extreme sentiment and price is at-or-near an inflection point.

Once we tested the ledge I went ahead and bought Apple calls. This fixes my risk but also levers me up.

This market has required serious intestinal fortitude all year long. The ugliest moments have been the best opportunities and the most textbook beautiful moments have been wicked bull traps.  Here’s to hoping that theme holds true.