Short term picture clear to me nowI looked very closely at the short term picture in detail and I'm quite sure I have the near term and big picture mapped out now. $Rifin is tracing out an expanding triangle ending diagonal pattern. I noticed the tell tale signs when I reviewed last week's trading.
I am looking for a decent but choppy decline in the mkt this week that takes FAZ up well over $10 later in the week. Ideally this pattern calls for FAZ to test the $9.95 area first then decline to $9.55, and then up to $10.20 later in the week. These are rough, but this is the profile of the trading that I am looking for. I'll be fine tuning these prices during the week.
However, this ending diagonal pattern calls for one last very sharp spike in financials around Jan 4-5. I am expecting FAZ to drop from over $10 into the $8 range on that spike to finally bottom. So I plan to switch out of FAZ over $10 and into FAS at that time to position for that spike move. Then I will switch back to FAZ. I expect FAS to jump by $6 during just a few days on that move. It's going to be a very sharp but brief spike that collapses very quickly.
Interestingly I see S&P putting in a lower high Jan 4/5 while the financials spike and put in their top.
Now I want to be very clear. After FAZ bottoms in the $8 range, then I see mkts crashing immediately. I am hesitant to mention FAS on this board at this late date before the crash that I see as imminent. Nevertheless, I have confidence in this short term ending diagonal pattern, and I am going to play this move, but I will caution that FAS is dangerous, and an overstay in this trade will result in getting caught in a crash.
As I have said repeatedly FAZ is the main place to focus because the big picture is extremely bearish. Despite the last spike in financials that I forsee, my targets remain in the low $30 range for FAZ in the medium term. Hard to go wrong with FAZ at any price.
Yes, I am saying that I expect mkts to crash starting during the first week of January, and FAZ to trade up to $15.90 soon after as an initial target. I see 1095 S&P as the first major support. A decent bounce would follow that, and then a much larger decline. I like 820 S&P as the next major target, another bounce there, and more declines to follow.
I am expecting to do a lot of trading over the next 2 weeks to position in the optimal way for the January crash. I will be posting my trades here. Dec was not a great month for me, but I expect January to be one of my best ever!
SC