We were preparing for two scenarios heading into October and began to see Scenario 1 play out(screenshot below). Scenario 2 in blue is what we favored going into the middle of this month. Our system is showing that October 21st is the ending period for this upcoming cycle. Both scenarios are fairly close to being invalidated as this cycle comes to a close. The difficulty with projected pullbacks is the fact that the market can be propped up through rotation between sectors or "coincidentally" into Fed meetings and White House Briefings.
Although it may appear scenario 1 played out we only given credit to our system if the exact price target is met along with the velocity that is expected. This allows for adjustments in future projections. The system has until October 21st to hit the expected PT. With current order flows we are seeing and the 6 remaining trading days until the cycle closes - odds currently favor longs. The weekly close will be key. From a technical analysis viewpoint - it appears that an inverse head and shoulders pattern may be forming in $SPY(screenshot below).
$QQQ (Screenshot below) - forming a similar inverse head and shoulders pattern. Much of technology have potential bullish reversal patterns so we will see if this inverse head and shoulders can materialize and negate any further downside price targets.
Below are some free trade ideas that you may want to consider as the market is close to reversing. They are delayed but you can still action with significant profits.
$CRM - Options or Shares
$SKIN - Shares
$UPST - Options or Shares
Previous winning trade ideas
Talk soon!
-J