CarMax … Dead Cat Bounce

That, Was Then …

Back in October last year, the update on CarMax, said this:

“… there could be small blip up to resistance in the 85-area before potentially rolling over into a descent that projects to the 4.00, level.

If and when that happens, CarMax rival Carvana, may be long gone; its disruptive vending machines possibly being used as homeless shelters or insect farms.”

Even with the short-squeeze mania last week, rival Carvana, remains down a blistering – 96.2%, from its all-time highs; having reached an interim low of – 99.1%, in December.

Insect farms, dead-ahead. 🙂

The ‘Bounce’

So, does getting to a high of KMX 80.92, meet the forecast of “the 85-area” ?

It looks close enough, but the real story is the bearish trade set-up.

I’ve lost track of the number of Wyckoff ‘Spring to Up-Thrust’, set-ups that have been covered since this post, over sixteen months ago; we now have another.

CarMax KMX, Weekly

Unmarked chart.

Long time users should be able to spot the set-up immediately.

For those new to the site or if more clarification is needed, here it is:

Getting down to the daily, is where a trading plan is created.

KMX, Daily

Several scenarios.

Three potential scenarios are below.

Remember, we’re in possibly the largest bull-trap in market history.

Those in control of the markets need to bleed-off the VIX Call options values by having the market go up, sideways, or down slowly (at first).

Here is the VIX Option expiration calendar for 2023-2025.

Going straight down at this juncture (although anything can happen), is not the most probable outcome.

Scenario No. 1

Lower open at the next session, followed by a labored move to test the underside of resistance.

The test can happen in one day or several days.

Scenario No. 2

Next up, is congestion tests before heading lower.

Scenario No. 3

Lastly, a steady but ratcheting move lower.

These are just three potential outcomes of an infinite number.

The market itself will give clues at the next session to the more probable outcome.


It may be after the 15th (past VIX option expiration), before there is a decisive move lower.

Not covered in this update is what happens if KMX, actually goes higher instead of lower. If that happens, we’ll post updates as necessary.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

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