Bayesian Probabilities Lean Bearish
By
Luke Miller
Bearish Bayesian probabilities (BPs) are still stronger than bullish ones, and I would have to say that my Bayesian-only work generally aligns with the yellow count discussed in Avi's charts.
Here are the updated paths: (1) [P=72%] the SPDR S&P 500 ETF (SPY) continues to stall in the 290s and begins a descent back to at least the low 270s, with the low 260s under that, and (2) [P=28%] The bullish leg begins more imminently with targets back towards 295ish, for starters.
With the vibration window now showing up for May 4-7, it sure does get interesting. At the micro BP support level there is 280-283 that could produce a sizable bounce higher as high as 295-305. Breaking 280 opens up 268-272 in a hurry. Challenging trading to say the least.
Longer-term long positions comment: In the SPY 240s a few weeks ago, I pounded the table to “buy anything that wasn’t nailed down” for those positioning further out. On Apr 27-30, I sold/hedged some of my longer-term long positions; and today I am feel comfortable for doing that and will hold off for now.
Moving over to metals, the recent action in the metals still presents as precariously bullish, as stated for over a week; and with the 24-hour breakdown, the path lower has won out for the moment.
We are averaged-in approximately where the gold miners ETF (GDX) closed on April 30 (for those following those posts), so it’s nice to have some of that pressure taken off.
A few paths: (1) [P=73%] GDX stalls in the 34-35 region and pulls back to at least 28 (but 23-25 can’t be ruled out), and (2) [P=27%] GDX continues its bullish advance that targets 38-40.
