This morning’s election eve NFP ramp should reach our target #2 from last Friday at the .886 of 1469.50. I would fade this rally if/when SPX reaches that level. This has pop-and-drop written all over it.
If you’re stopped out on the opening, I would look to reshort at the .886. As always, please use stops.
DX just bounced off the .618 of the 78.725 low.
UPDATE: 9:35 AM
That’s the tag of target #2 at the .886. It could leak a little higher, but I’m re-shorting here at 1469 with stops at 1474.
In retrospect, I should have expected them to ramp this after-market due to the election season BLS report which comes out in the pre-market hours. I thought we’d get a proper 3-wave correction before heading up to our target # 2, but neglected to consider the timing.
There’s some consolation in having nailed target #2 as well as we did target #1 yesterday. But, I’m disappointed to have given back some of the profit we’d booked EOD yesterday.
UPDATE: 10:50 AM
The dollar pushed lower to a 1.272 extension, a little beyond the .618 of the rise since Sep 14. This means DX is less likely to reverse at the .786 of 79.05 (other than a bounce) but could make its way down to the .886 of 78.899 by as early as Monday.
This implies that 1474 won’t stand as the high. Sure, we should pull back from current prices. The dollar is currently very oversold. But, we have to remain open to the possibility of a double top or even slightly higher.
UPDATE: 3:05 PM
The market has given back all this morning’s gains and is clinging to support. 1459 is an important level for it to hold, or there’s potentially much more downside — perhaps the .618 at 1457 or even the white channel midline at 1450.
If we get a bounce here, I’d consider taking profits at 1461. I can see a broken rising wedge and broken channel lines, but others show support at this level. I’ve spent the past several hours trying to get a handle on things and am, frankly, a little baffled.
I believe when things are unclear, it’s usually best to step aside and let them sort themselves out. So, I’ll let the market tell me which way it wants to go.
UPDATE: 3:50 PM
I’ll likely take profits going into the close. I still see a mixed next few days, and it seems silly to hold shorts into the weekend. So far, we retraced .886 of the drop from 1474, reacted down to the .618 from that, and should be up on Monday. But, I have no conviction. So, to cash I go.
Just looking for a little more action into the close.
Gone to cash at 1460. Post mortem probably Saturday afternoon.