The path forward is a monthly chart (long term view) with it’s 50 DMA as a guide. There is another shorter term path that is shorter in length of time established and greater in slope as show in the picture above. Which channel will we follow? As you can see in the chart above, the S&P500 indeed did follow the more established and more encompassing trend line as we can clearly see that it was rejected at that point before being allowed to follow the steeper sloped line higher. We will likely bounce on the bottom line of the steep slope path until we run into the point (perhaps around 3500 or even sooner), at which time it will drop to the lower line of the more established path, which happens to coincide with the 50 DMA. After that, we can have bounces on the way down as this wave remembers that every wave has a trough.
and a close up version:
And finally a quick update on trades:
Long 6 VXX May 15 2020 24 Strike Calls @ .43 (last price as of 2/23 = .68 each a 48% gain) (opened position on 2/18 and still open)
Closed 1 March 16 2020 325 Strike Put @ 2.52 (18% gain) (opened position on 2/11 and closed on 2/21)
Expired 1 Feb 21 2020 306 Strike Put @ .20 (expired worthless) (opened on 2/5 and expired on 2/21)
New trades are coming as this year is going to be volatile. Stay tuned…