Saturday, August 29, 2015

Aug 29 - Strong possibility of retest of lows

Although we have seen a strong rebound, I am leaning heavily towards a retest of lows in the next week or two.  On these sudden drops in the past several years, it has been typical that a bottom is carved out with very volatile activity between the bottom and roughly a 50% retrace.  The only exception was last fall's V-shaped bottom.  While it is possible it will repeat, I am less inclined to think we are capable of seeing such a bounce because of the severity of this recent drop which makes last fall's drop pale in comparison.  I picked up some at the money SPY put spreads expiring in a couple weeks at close Friday.

In 2010, both temporary bottoms retraced 50% before testing or breaking to new lows.
In 2011, we had multiple retests with most being rejected swiftly by the 50% level

 Right now, we are at 50% in SPY and leaning towards seeing a drop this week and possibly more than 1 retest.


tellzhang said...

Thank you, I agree that we will see even lower low on ES.

keep the great job!

Greenlander said...

Thanks Tell,

I would be very surprised if we don't see some trashing around to try and carve out a bottom or as you said a lower low.

Aug 25 - Re-entered (again) GLD short, long LVS, AMZN, NFLX, SHAK

I have been stopped out twice in last few weeks trying to short GLD.  I have a pretty sizeable position of Nov/ Dec GLD/ GDX puts. Also ha...