Lots of Room Down Below

8 Feb 2020

Was anticipating the three week test of the high. The closing minutes of market action today showed quite a battle to stay above the closing price of three weeks ago, 331.95. This feeble effort to take out the highs barely succeeded even though China has been pumping massive liquidity into the system to counter the economic slowdown that has been enhanced due to the corona virus. The US Fed has also been pumping in massive amounts of repo money to keep the system afloat. With all of that going on, prices barely surpassed the three week ago high (and quickly lost it right after the close). I purchased March SPY puts as we crossed 332, playing a failed three week test of the high. Could be a fool's bet as price momentum continues strong. But stochastics might be breaking down, and let's face it, who knows what crazy news might burst forward over the weekend?

8 Feb 2020

Nota

And if this three week test of the high plays out with a decline to perhaps the 50% retracement Fib, I shift my attention to a possible three month test of the high, a failure of which signifies much greater downside, longer-termed consequences. This will certainly test the "Fed Put."

8 Feb 2020

Nota

An interesting look at SPX when priced in gold. A long gold short SPX play looks like a positive play.