To Buy or Not To Buy?

that is the question.  With a clear break of the rising wedge/ending diagonal we’ve been following over the past month the most important question facing investors is whether to buy and leg into this correction at the 1340/1345 pivot support levels or whether there is a much deeper move in store that could retrace the entire move from the Dec lows.

Chart: Bloomberg

 

As it stands now we got the recognition of the 1.618 level we targeted at 1375 and subsequent reversal.  that keeps our b wave idea in play and if we are in c down it could be a violent trip lower.

We thought it would be tough to escape the quarterly Mar expiry without at least a scare.  The thing is we don’t yet know if this is just that, a scare, that we should be buying or is this part of a much larger move.  We think the SPX wants to test 1300 into expiry as that represents the largest open interest strike price on Mar puts and it was the most heavily lifted on the early break this morning.  The big trade is likely not into expiration but after.  Is this a buy or do you short the premium burn bounce?  it’s not yet clear.  we think there is a bigger move in store but we can’t yet be sure.  stay nimble and opportunistic in here…

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About exantefactor

capital market veteran of over 15 years covering multiple asset classes. Focused on analyzying markets ex ante (before the event).
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