Double bottom support was not able to hold and the markets kept plunging before another attempted rally ensued:
<< Double Bottom Support: drive.google.com/file/d/0B9dBZPXNckXYQnN...
<< Intraday Spiral Meltdown: drive.google.com/file/d/0B9dBZPXNckXYMk8...
That's what can happen when volatility are at the extremes. Practically anything can happen. See previous intraday analysis that speculate either follow-thru run down or start of a complex meltdown. Intraday meltdown did not result in a complex 13-waves down.
>> SnP500 Daily: drive.google.com/file/d/0B9dBZPXNckXYck5...
>> Dow Jones Daily: Use same analysis for SnP500.
>> Compq Daily: ditto.
Dow Jones and Compq are already over-extended iii-rds on the daily charts. Somewhat reverse-similar to August 24, 2015 when SnP500 was over-extended but not Dow Jones.
>> Intraday Analysis: drive.google.com/file/d/0B9dBZPXNckXYQ0F...
The run up off Jan 20 low is either an A-B-C bounce up or a 1-2-3 rally. Right now still in 50/50 probability range. Toss Coin.
Tapes today started with a bang well above 3:1 for advancers vs. decliners. Thus, expect continued rally toward the close. And since the weekly bar should be very good; then expect a follow-thru rally for at least the first few days next week.
Check previous instablogs for medium-term analyses.
The previous instablog was designed more for contrarian daytraders with provisions for medium-term traders just in case the volatility setup results in either truncated v-th or the iv-th and v-th not printing at all.
Not suitable for swing traders since the trading range for the iv-th and v-th is still very wide when considered on a risk vs. rewards basis. But then, for those who took positions and wish to execute a swing trade instead of daytrade or medium-term; it's not a bad proposition at all considering that SnP500 has been consolidating for more than 8 months already in a very wide trading range compared to Feb/July 2015.
For Daytraders: Better course of action is to take 1/2 to 2/3-rd partial profits. Perhaps keep at least 1/3-rd positions just in case the markets start a spiral meltup (on the intraday charts).
For Medium-Term Traders: Perhaps taking off 1/3 profits in this run up can prove a wise decision to alleviate angst later if the SnP500 just keeps following the 90% probability of the iv-th and v-th happening toward early February. Discretionary whether to add more positions on a lower low (or even truncated v-th low on daily); OR use partial profits as 'warchest' for extra wiggle room to the downside.
* Myself: As indicated last January 20 on my Comments; I got tired of being stopped out on my daytrades at b/e twice. So I decided to take partial profits on the first potential 1-2-3-4-5 vertical run @15,800 target on the 5min chart that day . As usual, when I start surrendering to whipsawy markets; they go the way I was expecting in the first place and I ended up looking like a stupid fool (... actually, I sold that darn 1/3 YM positions just to cajole the markets to go my way ... he! he!).
Sold another 1/3-rd positions when YM produced a potential a-b-c or i-ii-iii up on the 30min chart toward the 16,064 double top resistance on the 5th day (not bad in terms of days being able to hold daytrade positions --> but not satisfactory based on run rate).
Will sell another 1/3-rd positions on this A-B-C vs. 1-2-3 toss coin analysis after this grueling 8 market days hold for a daytrade.
Bought a few SSO back then as possible swing or medium term so I don't feel like being left behind. Got very little cash these days and I don't want to leverage after 6 years of rally off the March 2009 significant bottom. Thus, will just have to keep daytrading these markets as much as possible using the eminis. A progression from more swing trades, from June 2013 to June 2015 --> as markets rallied into a momentum run in Nov2012 to May2013 setting the stage of reduced momentum on the remaining run ups after that vertical run of 7 straight green months. And started deleveraging my account from 155% max in Dec2011 to 115% in Dec2013. I was able to raise 10% cash for short-term trading purposes with 5% allocated to YM trades (for deposits on overnight holds).