Dow: Potential Big Algo Sell-off Post-Fed 'Talk' Tomorrow
We clearly finished in the red today while being mostly flat for the majority of the day. This shift in negative volatility in the last hour will likely continue slightly tomorrow at open, with increasing downside risk before the Fed speaks, and likely sell-off algorithmically hard when his talk completes.
If the Fed is dovish on cuts for September, this idea will not occur. If however, as I highly anticipate and expect, he is not ultra dovish for September cuts, this idea will pan out. He MUST virtually guarantee at-least a 25bps cut in September or there will be a large sell-off.
Watch for a 25,398 test at-least, with the potential for 25,285 depending on his specific wording.
One very important note: The PCC ratio continues to fall despite the recent 3 day bounce to the upside that we had recently. What this tells you is that algo bots are selling the bounces, and not buying. Therefore, the bounces we receive are simply bounces off resistance levels - NOT a new bull run.
Advice: Long Gold/Silver. Add TVIX shorts slowly at 20.00 or below.
- zSplit
If the Fed is dovish on cuts for September, this idea will not occur. If however, as I highly anticipate and expect, he is not ultra dovish for September cuts, this idea will pan out. He MUST virtually guarantee at-least a 25bps cut in September or there will be a large sell-off.
Watch for a 25,398 test at-least, with the potential for 25,285 depending on his specific wording.
One very important note: The PCC ratio continues to fall despite the recent 3 day bounce to the upside that we had recently. What this tells you is that algo bots are selling the bounces, and not buying. Therefore, the bounces we receive are simply bounces off resistance levels - NOT a new bull run.
Advice: Long Gold/Silver. Add TVIX shorts slowly at 20.00 or below.
- zSplit
Comment:
Sorry. This idea is valid Thursday/Friday. Not tomorrow. Got my dates wrong.
Order cancelled:
Sorry. This idea is valid Thursday/Friday. Not tomorrow. Got my dates wrong.
Trade active:
This idea will now be valid for Thursday/Friday. After the Fed did not hint at cuts I expect a sharp downtrend either Thursday or Friday.
TP #1: 25,398
TP #2: 25,285
I suspect September won't have a cut unless the market sells off quickly and sharply. Not to say that will or will not happen, however, my TP targets above remain as a result of the Fed not mentioning dovishness in his Wednesday moments in Jackson.
TP #1: 25,398
TP #2: 25,285
I suspect September won't have a cut unless the market sells off quickly and sharply. Not to say that will or will not happen, however, my TP targets above remain as a result of the Fed not mentioning dovishness in his Wednesday moments in Jackson.
Trade active:
Targeting a potential big algo sell-off tomorrow if the Fed is a neutral to hawkish as expected.
Be careful.
DO NOT LONG until 26,400 close.
Be careful.
DO NOT LONG until 26,400 close.
