As we posted yesterday, the ES Futures were inside day. The potential move out of this range is very important; as an equilibrium break at this point in the game is the key factor to future price action.
Futures soared beautifully into Janet’s speech pre-market, as we ever so swiftly pushed higher to 1880. As we came off our highs, things seemed normal. Until the afternoon, when all hell broke lose and careened to the lows by the close.
This sets up an inside day failure. A breakout to trap traders long and potentially bring us much lower. This setup has the capability to cause MASSIVE destruction (see the SPY weekly chart at the very bottom).
Further, as we posted over the weekend, Oil (yet again) is playing a huge factor in this selling. We went inside week and down below 29.40, and finished today with a shooting-star candle — yet another sell signal.
If a catastrophe were to happen, something to the likes of a 5% down day in the markets, this would be the epic setup that we would be looking for. Below 1840, then 1825, this market sees epic selling. I currently hold a shit ton of IWM puts and I am long DWTI, bring me more leverage, more volatility, and another fifth of Jack – let’s get this party started.
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SPY Weekly Chart – Inside Week Failure to start the year:
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How would you recommend a newbie play this? Can you be more specific on the puts?
That’s a tough call — depends on risk tolerance, capital restraints, etc. Need to be short below 1825 for sure. I have multiple expiration’s of the IWM puts. Some ATM, some OTM.
Looks like we’re positioned similarly. Let the destruction ensue.
Just a great blog you have going here, my account balance thanks you.
Much appreciated my friend
Really enjoying your work man. Could you explain what an inside day/week is, and what a failure of that means? Appreciate the response!
Shoot me an email [email protected]
now this is a blog post i can join in on. my chips are not all in though….yet.