CMG Overview

This past week, a fella from an options group, Options Bistro, had asked me about CMG.  Here was my answer:

CMG is in a short:

 And that is after we eliminated the very last long from our chart, seen below.

This is what I wrote:

Scott, if we look at any long-term move, where we see:

PRICE GO UP TO A high, from those 50% bounce marks, and then go higher, into those -23.6% marks, then yes:   profit taking occurs, and then price descends again, back down into the range that we just witnessed unfold, over a long term timeframe.

NOW, think of those -236's as points where you COULD SELL OUT, or SELL SOME or SELL CALLS.   This is because, more than likely, price will descend back again.

The next move then will be drawn from many points, but the one we buyers (new buyers waiting to buy again or for the first time) is drawn from the ORIGINAL 50% mark to the -236 point.   Read that again.

So, that original high point where our zero line was is now a new intermediate high of the new range.

In CMG's sake:

1.   PRICE REVERSED at 493 or so, go back and look.

2.  Trend, short, was proven by moving LOWER than the ZERO line, 352.96 (see it?)...that was the place where my marker was drawn, from 632.98 down to 352.96..

3.   Yes, price CAN go lower and how low is yet to be proven as price is still going lower....now, bear in mind that price does not EVER, in a daily long-term chart, go one direction and down to targets, such as your 179.

This is because in the auction process, price wiggles in smaller ranges...there are BIDDERS at EACH LEVEL, each key level where defenses come in, where your buyers bought a year ago or more:  such as 250, 200, 180, etc.

So, be aware that price COULD go to 179, but it may bounce at or about 287, that -23.6% line....179.91...then bounce.

As a long, the concern SHOULD be the hope and prayer that FINALLY originally bidders DOUBLE DOWN.   We hope they defend 287 and bounce price back up into the next short range:

**493 drawn down to 287 (rounded)....this then should be your plan:

1.  WATCH carefully, will 287 HOLD or will it go lower?  IF SO, get out.

2.  IF IT BOUNCES, wait for the new short to play out, as price will rise back up into the **RANGE noted above and you should find that 50% mark now.

DJ

Scott open your eyes wide, and look at HOW CLEARLY price REVERSED up there at 493...there was an attempt in APR-JUNE to Bid it back up past that point as you can clearly see the attempts in that daily chart....price descended to 460-475, climbed back up past 492.97 to 493 and change and then there were massive selling candles.  THIS IS SHORTING not just selling.

============================HIS EMAIL TO ME============================
On Fri, Aug 25, 2017 at 6:49 PM,

" Great chart. Thanks for taking the time to do that. My trade is still sitting at breakeven so I have time to get out. At what point would the fibs trigger a buy? Seems like just about any chart would have lower levels that it could fall down to. I'm guessing you would pick a support point for an entry and if the bounce doesn't hold bail with minimal damage. I'm looking at the recent low of 296 for now as my eject point. I did double sell some calls higher so bailing at a break of 296 and letting those expire would still get me out at even. In fact I could probably continue selling calls and use the 286 level as a line in the sand. I guess I could wait and get in at 37!...LOL You never know with this thing."

OK, it is so unoriginal of him to say this, esp, "you never know with this thing."

 

The word I am using here is UNORIGINAL.  Now, that does not mean that he is technically incorrect, but with these ranges, esp with a series that we can find here in CMG, this is CLEARLY being technically shorted.   What we do not know is where they will be taking profits.

 We can only watch, and then look for EVIDENCE of profit taking then get OUT at the next rip, back up into the range noted in my reply...from the original 50% mark ZONE, down to the next reversal point which is coming right up, we hope, for his sake, as he is LONG.

 

DJ