As with many things in the magical world of trading, the chart below is simultaneously marvelous and awful.
The chart, by the way, is the /ES futures over the past week or so. The red rectangle denotes the nearly perfect, and I mean almost mind-bogglingly perfect, rejection away from the Fibonacci. I remain gobsmacked that all this time, thanks to the bizarre-ass way the TOS platform shows weekly and daily charts, that I was using the wrong Fib levels. It would be like examining charts through a sheet of wax paper. I clumsily tried to untangle this mess in an impromptu video I made last night.
So, the marvelous part is that Fibs are working gloriously, with almost deity-like powers. The awful part is that, through a combination of a pretty rough past six trading days and the fact I thought we had clearly violated the Fib across the board, I pulled back hard on risk and chopped my positions from 39, to 34, to 20, to 18, and, pathetically, to merely 12 at yesterday’s close.
The ONLY good thing I did (and this was after the Fib thing began to dawn on me) was that I entered a huge short position on the IWM after hours while there was still time, hoping to God I wasn’t going to see a sea of green in the morning. Thus, I have 13 positions now, although I still consider my weighted exposure of 80% to be pretty damned pathetic.
I would also hasten to add that the gap close of the VIX nearly brings tears of joy to my eyes. I mean, just LOOK at it. Is that glorious? I think I can confidently say that the low 20s is no longer the ceiling we had to endure for years on the VIX. Now it’s the freakin’ floor.
And, just to harp on the Fib once more, here’s the daily (as opposed to minute bar) chart, and the point reversal was accurate to an accuracy of about 1/5000th (whatever that percentage might be). Again, tears welling in eyes.
So, look, the market is about to open, and I need to get this post out the door. I’ll just leave you with one lunatic prediction. One thousand points lower. This year. The /ES. 4520. I’m not kidding.
And that’s all I’ve got to say about that.
