Consecutive Weekly Bars were 4 Ticks apart, the 2nd being the lower of the two
for September... a Higher High for the ES, by a 7.5 handles.
Tomorrow is "triple witching" and we should anticipate volatility resulting from the
expiration dates of the three financing instruments - stock options, stock index futures
and stock index options all expire simultaneously.
In addition, Derivatives Sqare twice a year @ the BIS - March / September.
The effects are usally quite dramtic and "Max Pain" is unreliable as there are far
larger Pools of Capital squaring.
We are four trading days from the next Federal Reserve pronouncements. Typically we
see the TREND exert itself ahead of the FED. If the do nothing... or pander the same
- then it will be October, that won't work for most... not at all as Q3 Earnings are
going to be - horrific - and everyone within the Complex knows this.
We are yet to hear actual warnings, instead we see teh Media edge off "issues" and
"severe Issues" with Semiconductors.... Not Black GOLD, but Arrangement GOLD.
It won't pass, buggy whips included.
Sellers remain and loom quite large, Retail was squeezed once again today as Futures,
Put options and Shares were sold into during the prior several lows below 4441.
Friday's are always a low liquidity session - with one expcetion, 3x ad 4x expirations.
Usually the expanding range counter-trends last from 3 to 7 trading days.
Gap Fills are axiomatic as we move from Monday to Friday as the probability increases
as we move throught the week.
More than a few traders are wondering if we off to far higher levels.
We had solid strucutre counts on the YM RTY ES and even the NQ although it was the
laggard. These counts respectively 8/9 - 8/9 - 6/9 and 4/9 have reversed.
We now see the range expand as indicated by the VIX / VVIX / VXN - as vol of vol began
to fall shaprly we has our signals the trade would reverse, this was yesterday.
It will be difficult for Price to move to close over last months high indicated in the chart
above. It may get close, but it will take a monumental effort as Institutions are in a
very clear pattern of SELLS, they abated as there were no buyers, even the Retail Dip
buyer tossed in the towel.
The same Dip Buyer is now looking for 16, 17 , 18K for NQ - 5000 for the ES and 2400 for RTY
as well as 37K for the Dow after this reversal - and to be fair, for well over a year they have
been 100% correct.
It was not until last September 3rd we had a sharp correction unimpeded.
It has well beyond one year Price has tested it's 200SMA.
We can how the defense came in looking at the 1 Hour Chart - the Death Cross was not to be permitted.
Quite often, reactions from the 100SMA 1Hr are violent as it is THE LIS for Professional Managers.
No one wants this game to end when the Taxpayer is funding enormous Profits, No One.
The issue is it cannot contniue given the Global Backdrop and the longer it does, the more severe the
Drop.
We do not believe it will fall more than 10 -15% - perhpas dipping in to 400SMA Dailies, but not exceeding
3588 as the 1/5 conclusion, this would imply a larger, perhpas 30 - 50 % correction, one that is not
recoverable for a long time.
There is price where it squares, we are approaching it. Sellers moved Price out of their own balance as they
have more to distribute.
The only real hedge they have left is Volatilty Instruments, these are worthy of following very closely to
determine when and where they have comfort in beyond Delta Nuetral for downside Profits, they
continue to build these positions as VX declines and Protection decreases in Price along with Vol of Vol
or the VVIX Instrument.
Know what to look for as we move through this period.
It can and wil change very quickly, we firmly believe 200SMAs will be tested into October/November
and would suggest the 400SMAs stand a higher probability of being an Objective.
We believe 4509 - yeah, that's going to be a very tough Close EOD.
It should be SOLD wholesale.
for September... a Higher High for the ES, by a 7.5 handles.
Tomorrow is "triple witching" and we should anticipate volatility resulting from the
expiration dates of the three financing instruments - stock options, stock index futures
and stock index options all expire simultaneously.
In addition, Derivatives Sqare twice a year @ the BIS - March / September.
The effects are usally quite dramtic and "Max Pain" is unreliable as there are far
larger Pools of Capital squaring.
We are four trading days from the next Federal Reserve pronouncements. Typically we
see the TREND exert itself ahead of the FED. If the do nothing... or pander the same
- then it will be October, that won't work for most... not at all as Q3 Earnings are
going to be - horrific - and everyone within the Complex knows this.
We are yet to hear actual warnings, instead we see teh Media edge off "issues" and
"severe Issues" with Semiconductors.... Not Black GOLD, but Arrangement GOLD.
It won't pass, buggy whips included.
Sellers remain and loom quite large, Retail was squeezed once again today as Futures,
Put options and Shares were sold into during the prior several lows below 4441.
Friday's are always a low liquidity session - with one expcetion, 3x ad 4x expirations.
Usually the expanding range counter-trends last from 3 to 7 trading days.
Gap Fills are axiomatic as we move from Monday to Friday as the probability increases
as we move throught the week.
More than a few traders are wondering if we off to far higher levels.
We had solid strucutre counts on the YM RTY ES and even the NQ although it was the
laggard. These counts respectively 8/9 - 8/9 - 6/9 and 4/9 have reversed.
We now see the range expand as indicated by the VIX / VVIX / VXN - as vol of vol began
to fall shaprly we has our signals the trade would reverse, this was yesterday.
It will be difficult for Price to move to close over last months high indicated in the chart
above. It may get close, but it will take a monumental effort as Institutions are in a
very clear pattern of SELLS, they abated as there were no buyers, even the Retail Dip
buyer tossed in the towel.
The same Dip Buyer is now looking for 16, 17 , 18K for NQ - 5000 for the ES and 2400 for RTY
as well as 37K for the Dow after this reversal - and to be fair, for well over a year they have
been 100% correct.
It was not until last September 3rd we had a sharp correction unimpeded.
It has well beyond one year Price has tested it's 200SMA.
We can how the defense came in looking at the 1 Hour Chart - the Death Cross was not to be permitted.
Quite often, reactions from the 100SMA 1Hr are violent as it is THE LIS for Professional Managers.
No one wants this game to end when the Taxpayer is funding enormous Profits, No One.
The issue is it cannot contniue given the Global Backdrop and the longer it does, the more severe the
Drop.
We do not believe it will fall more than 10 -15% - perhpas dipping in to 400SMA Dailies, but not exceeding
3588 as the 1/5 conclusion, this would imply a larger, perhpas 30 - 50 % correction, one that is not
recoverable for a long time.
There is price where it squares, we are approaching it. Sellers moved Price out of their own balance as they
have more to distribute.
The only real hedge they have left is Volatilty Instruments, these are worthy of following very closely to
determine when and where they have comfort in beyond Delta Nuetral for downside Profits, they
continue to build these positions as VX declines and Protection decreases in Price along with Vol of Vol
or the VVIX Instrument.
Know what to look for as we move through this period.
It can and wil change very quickly, we firmly believe 200SMAs will be tested into October/November
and would suggest the 400SMAs stand a higher probability of being an Objective.
We believe 4509 - yeah, that's going to be a very tough Close EOD.
It should be SOLD wholesale.
It is our primary indication.
Looking forward to closing some AMC 45's today.
Wide ranges continue to expand, today will tighten up a bit - imho.