hedge said:

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any decent books for a beginner?

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I'm only doing this because our favorite care bear mentioned being interested in the wave count of SPY. I do realize that most of you don't believe in EW and don't want it clogging the board. So please skip if not interested.
Using daily candles for the long term and 1hr candles for the zoomed in view, starting at the March 2020 low on 3/23/20 and SPY $218.26, we had a Wave (1) that ended on 9/2/20. Wave (2) then corrected in an a-b-c fashion where a=c on 10/30/20.. meaning that the "c" wave ended near where the "a" wave ended due to market pressures (stimulus, early signs of inflation, market being way too oversold, yada yada) pushing the market upward despite it not fulfilling it's full correction.
So from that bottom, to that wave (1) top and the Wave (2) bottom, we can set our fib extensions tool and outline where the mid term structure will end. Using Fibonacci Pinball, we can outline a general expectation for all 5 waves within Wave (3), and we can also break down those waves into their subwaves.
So looking at my chart, the most recent ATH time was the end of Wave (v) of 3 of (3).. meaning the completed 5th wave of the larger degree 3rd wave within the largest degree 3rd wave. The five waves within Wave (3), of which we are now in the fourth, started after the Wave (2) 10/30/20 low. We had a five wave micro structure up to 2/16/21 to form Wave 1 of (3). Wave 2 of (3) bottomed on March 4. During that 3rd wave we had to form a smaller degree wave (i) and wave (ii), and an even smaller i and ii within that Wave (iii). Needless to say, I've been tracking all of the structure from the long term to the ones that complete their moves on the 1 min chart. Look at my chart if you need a visualization.
November completed wave (v) of 3, so that top now gets the 3 over it since we know the 3rd wave within our larger Wave (3) has completed. So where does wave 4 land?
Well.. 4th waves LOVE to target the 38.2% retracement of the 3rd wave that preceded them. In this case, Wave 3 started at the bottom of Wave 2 on March 4 and completed on Nov 22. So go ahead and draw a fib retracement from that low to that high. That's the general area I'm expecting a bottom. If you need more evidence to believe it, draw a fib retracement from the bottom of wave (ii) to the top of wave (iii) and note where that wave (iv) ended. You can do the same with the smaller degree wave iv. Look at my chart to see the levels.
Now, within these 4th wave corrections, they usually take the shape of a-b-c where "a" and "c" are impulsive structures that move against the overall trend and "b" is a 3-wave corrective structure that moves with the the overall trend. This isn't always the case (looking at you IWM since March which is one of the most complicated x-y-z (look it up, its a thing) 4th waves I've ever seen.. some of you call it a darvish box). Knowing this, our "a" wave loves to target the 23.6% retracement of the preceding 3rd wave. And guess where S&P hit on Friday?
I was able to trade all of the indexes very easily today due to knowing the "a" wave bottom had a high probability of being in and to expect a bounce. But NEVER hold long term during 4th waves, especially index option trading like SPY, QQQ, IWM, or DIA. They are treacherous due to being corrective in nature.
So we know "a" has likely bottomed (again, we operate in probabilities, let price action tell us where we are, remove our own biases, and keep an open mind and 1 or 2 alternate counts just in case). But this fibbing very well so far after the previous completed waves fibbed perfectly as well. I have no reason to believe an alternate or complicated structure is on the horizon until the market shows it to me. So that means we are currently in the corrective upward "b" wave. These are much harder to predict. They can retrace the "a" wave anywhere from 38.2% all the way to 100%. Some of them even make new all time highs. What do you think the period from 2018 to March 2020 was? It certainly wasn't impulsive.. because it was a "b" wave culminating in the market NEEDING a huge drop to finish off it's 4th wave of the even LARGER degree. COVID was merely the excuse that sentiment had been waiting for. If it wasn't that, it would have been the election. Or the FED. Or some other nonsense. Learn to get a feel for where sentiment is. The look at impending news as merely a catalyst for what sentiment was already WANTING to do.
"b" waves can also be measured another way. You wait for them to complete the initial 3 wave move (essentially.. the "a" wave within the larger "b" wave since most waves within 3 wave corrections subdivide into their own a-b-c.. which it looks like we had today), and then you measure a retracement starting at the top and ending at the bottom. "b" waves like to target the 123.6%, 138.2%, and most especially the 161.8% retracement of that measurement. It won't always hit directly, but it gives you a good idea of what to expect.
After the "b" wave completes, you will get a 5-wave impulsive decline as "c" waves are ALMOST ALWAYS impulsive 5-wave structures. And they can happen FAST. Sometimes the wave 1 and 2 within them will be semi slow developing. But once you hit the 3, its straight down and usually ending with a diagonal on the last leg. Look at March 3, 2021 as an example.
So all that said, long winded and full of fluff, I expect us to top out somewhere between SPY $465 and $468 this week. But I definitely expect a bottom after that around $434.70. But do keep in mind, I mostly measure SPX and ES and usually only check on SPY to make sure everything lines up and I have confluence. I also keep charts of all the individual S&P sectors. Sometimes the majority will be showing one thing while the market is propped up by some lagging sectors. It can help forecast the next move if the overall index hasn't yet done what the majority of sectors have done. Abd I'm certainly not an expert. I'm maybe a 5 or 6 out of 10 at best on the EW master scale.
I also have to mention that I usually keep alternate counts. You can't ever work in absolutes and assume things.. it's based on probability and familiarity of previous trends. And as of Friday we were in VERY oversold territory. I've learned to never count the bulls out. The alternate count would have us trying to make up what would become the Wave (i) within Wave 5 of (3) which should target between SPY $498 and $520. Those are the levels whether we have already started Wave 5 of (3) or if we're still in 4. On the downside, I do not see us dropping lower than SPY $429.90 which is the 76.4% extension of the Wave 1 high and Wave 2 low.. and can be a common landing spot if other fib indicators line up.
If you want to trade before we are clearly in Wave 5, just be mindful of your stops. Things can get overlapping, treacherous, unexpected, and painful. Trade knowing your target and be ready to bail if the trend goes against you. You'd rather have bad luck and miss the upside than stupid luck and catch the downside. And again, please don't put faith in my analysis. I'm an amateur who is learning more every day. I'm wrong a lot. Sometimes I'm right but I'm wrong on timing. Sometimes I'm wrong on a smaller degree but the larger degree ends up being correct. Stock market is a *****. Don't blame me.
See yall soon. Almost out of timeout.

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TheCellarDoor said:

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Woke up to a gap up and another 5 star commitment! LFG!

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Triple_Bagger said:

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Was assigned this morning on some 12/17 puts I sold (10 days to exp). Didn't think I'd get assigned this far out. Another lesson learned.

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