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QQQ Option Expiration Pinball

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On Thursday, the SPX came just shy of a 540 degree move to 4187 up from the 3810 May 20 low.

As it stands, the index has rallied some 360 Gann points toward this 4187 region.

You can’t make this stuff up.

Yesterday’s report was looking for a 5th wave up and, after an early drop, the SPX reversed with authority.

The above chart shows a wave 3 impulse played out following a small Angular Rule of 4 Breakout.

The SPX rallied above horizontal resistance (red) and then backtested it before reversing with authority on Thursday.

If this key 4187 region is taken out, an extension to 4300 is theoretically possible.

Be that as it may, breakage now back below Thursday’s low that sticks opens the door to lower prices.

Clearly the shorts were ambushed yesterday morning in what looks like an orchestrated opening low and reversal.

Let’s take a look at the picture for 2022.

It looks like a wave 1 decline bottomed in January followed by a wave 2 corrective rally into the end of March.

From there, a waterfall decline started consistent with a wave 3 decline.

The blue ellipses are fractals with the A B C pattern in the spring being much larger than the possible A B C pattern since the May 12 primary low.

The bottom line is that after this rally culminates, another leg down, a 5th wave, should play out that undercuts the May 20 low.

Exemplifying this notion is the action in TWLO which was downgraded, gapping down 5 points only to reverse the entire drop within minutes and go on to close up 5 points on the day.

Ain’t symmetry grand.

Yesterday we stated that 180 degrees up from the 280 QQQ low is 315. The Q’s closed at 315.12.

You can’t make this stuff up.

However, June 3, today, vectors/vibrates off 319.

Consequently, if the Q’s explode and sustain over 319, we may get Option Expiration Pinball to 319/320.

In sum, this morning we get the jobs number. It would not be surprising to see another whipsaw like Thursday.

Yesterday, Fed Gov Brainard was hawking and she is the biggest dove at the Fed… and the market shrugged it off.

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