After market close

Market is weak with bad news from C. Open gap is not filled today. S&P 500 broke down the 740 level, and Russell 2000 down below 390 level.

No adjustments have been made today, but I will adjust the position next Monday.

Intraday outlook at 11:30 am

Although the market looks ugly, i think the market will have a rebounce at close today.

general market movement

The relative strength comparison didn't look well. Nasdaq didn't have any leadership today. S&P 500 didn't close above 760 level. It means the possibility of breaking down is a lot higher than 2 days.

I haven't made any adjustment to my option position yet. The probability of losing is a lot higher now. I will make adjustment in the coming days.

Study of Russell 2000

Lets look at Russell 2000 from a longer-term perspective. There is a lot of symmetry in the chart.

1. There is a top at 519 on 1/6, and there are 3 shoulders at the left with only 2 shoulders at the right. It is questionable the one at 2/13 is S3. Assume it is not, we should have a rally back to create a S3 in the near future. S3 should be at around 433 level, that is also 50% retracement between S1 and the recent low.

2. The height from 1/6 to the low of 1/20 is almost the same as the height from S1 (1/28) to the recent bottom (around 394.58). Based on the Fibonabbi extension, the 100% down leg is almost fulfilled, and a rebounce is expected.

In conclusin, the first target should be 433, and this analysis is confirmed wrong when RUT drops below 392 for more than 2 days.

What is the "right" move

The market is irregular but is always right. Never argue with the market or you'll lose money.



Current positon:

short RUT Mar 460 Call
long RUT APR 480 Call