Nasdaq reached a level of overbought not seen since 2000 and 1999 this week, against some regression channel resistance.
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Target 1 would likely be the 21 EMA again in the main chart area.
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The % distance from the 200 DMA is extremely high
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One of the main reasons I am taking this short (via puts on NQ expiring OCT 16 on Z contract) is the seasonal top in election years.
I talk about seasonality often, and one of the big shorts of the year is at the first week of September into around OCT 15.
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Over the past 8 trading sessions we have seen an unprecedented amount of tech blocks (mostly in FAANMG) which indicates that dark pools are selling into the top. I have not yet witnessed this type of block activity for the entire 2020 year.
💲 Block level ($) ● Confirmed dark pool block 💔 % BELOW block level 💚 % ABOVE block level
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SPX futures currently trying to generate a tweezer top after (falsely) punching through a major ascending trendline yesterday
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VIX futures show that we have a big selloff into mid October. I have puts on ES and NQ for OCT 16, the last possible Friday weekly expiration before the OCT 20 VIX futures expiration.
VIX election year seasonality is being followed with the ramping of VIX and SPX at the same time starting at the end of August, to the same mid October date.
I took a lot of profit here at the bottom of this pitchfork. What a VERY nice day.
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As an aside, the yield spreads against the 2YR could only diverge for so long against SPX. There is a much deeper correction likely to fix this
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The percent stocks above the 100 DMA also diverged for over 2 weeks from the SPX price, another reason I believe we retest AT LEAST the 3400 level back at the old FEB 2020 ATH
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HOLD ON TO THE 21 EMA at a minimum.
Next targets will be healthy 50 DMA pullbacks. At this point I am referencing 1999 and 2000 on what could happen next in this tech rally.
Do not be surprised if we get some rotations into beaten down sectors in the next few days/weeks. This is how the dark pools operate, which make up 40%+ of total NYSE volume now by the way.
Seeing a lot of energy dark pools today. We have massive amounts of dark pool late sell blocks on SPY and QQQ. I will post those at the end of the day today. Those levels (and equivalent SPX500 and ES1!) will be useful in the future.
Here are the current major dark pool levels. One target could be back at the 20 million level of 337.05 or 332.14. Price likes to retrace to these major levels in the past for retests.
Only dark pool levels > 10 million are shown.
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We may be getting close to some kind of pullback here as the month range is Month CAM R3 to S3 on NQ. GREAT DAY
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DJI futures did the "least worst" today. We have explored the entire Weekly CAM range from R4 to S4. Week R4 just happened to be where Month R3 was located adding further conviction of a big top (there were MANY reasons).
If YM retraces back to the middle of Week S4/R4, that would generate a weekly doji candle from Monday - Friday. It is very possible we do indeed get a large counter rally.
If that happens it means a significant top has formed with a weekly doji candle and high volume, meaning the seasonality projections are more likely to mid October with a selloff of equities.
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ES (SPX future) is approaching the old FEB ATH near 3400. this was my first target. I will unload about half of the short there.
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Reminder that this is exactly what election year seasonality predicted for DJI, a top on SEP 2. Combined with all of the other knowledge it was a high probability trade, which is what trading is all about, probabilities.
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Next target will be the 50 DMA below, which is pretty standard if you go back to 2009, 2000, 1999 after this level of overbought is achieved.
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We are now beneath EVERY FAANMG block for the past 9 days that they were selling into toward the top. Dark pools showed they way when they unloaded all of the bubble tickers.
NDX is now opposite of the regression channel, I expect a bounce and then possible more selling.
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SPY has reached the first dark pool level, more below. We are filling a lot of gaps today. HODL
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I took a small long here on Month CAM S4 for ES. Completely closed the short for over a 200 point gain on ES.
I dumped the majority of NQ shorts and my 11300 strike puts on this volatility spike. There could be much more downside but profit needs to be taken at key levels.
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EVERY FAANMG BLOCK BUSTED. THEY SOLD INTO STRENGTH, ALL OF IT.
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Watch for 50 DMA retests on NDX and SPX. We may get a relief bounce. The overall bias is still down with seasonality to mid october.
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New weekly lows on AAPL, hits 20% total correction. Follow the money and the dark pool blocks shown on the screen and in text form below.
I was telling everyone to sell Tuesday premarket, now one agreed with me. So I thought "I must be an idiot" and didn't follow through... Now I'm down 5k$.
I'm still holding stocks.
I don't understand why people sell everything in the index, I feel Amazon and Walmart as essential and dominant services/stores would be a good hold.
I feel like such an idiot for not listening to myself on so many occassions. But I lack self confidence.
Everyone I talk to still says rebound today.
I don't know why they're so optimistic all the time.
I was pessimistic most of this bull market but they finally converted me with the fed inflation announcement. My best friend yelling its amazing news lady dah. I went almost all in, I saw a good week? Of upside then was panicky on Tuesday now boom.
Still don't know what to do, everyone says hold, I say, 30% down to go.
mortdiggiddy
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@Chaython I am not saying hold. They sold all those FAANMG stocks for a reason.
Stick with seasonality for election years which has been extremely accurate.
This is not like June FOMC which only called for a 3-5 day pullback.
Chaython
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@mortdiggiddy, I didn't see your message in time. Employment was good, and there was positive momentum before open + 10m. So I went back buying, went 1k up now -3500.
9k down in a week. I kept telling myself to sell since tuesday, but everyone I talk to was optimistic. Now I feel obligated to hold, where before I was only holding because of my friends.
mortdiggiddy
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@Chaython, It is a little too difficult to relay information live in Trading View through ideas. Shorts were wise until the supports this morning to close out the majority in profit. It helps to have traders around you that are helping guide your trades.
Going long against the grain is not the right idea. It takes discipline to perform in these types of quick selloffs.
Chaython
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@mortdiggiddy, IBKR isn't enabling options for me, I've been demanding it all week so I could short, mostly hoping the shorts would secure the longs during a dip. Where do you trade, that edge site is just market research stuff?
mortdiggiddy
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@Chaython, I PM'd. As a vendor I cannot discuss these types of things publicly in comments or TV chat groups.
v01atile
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@mortdiggiddy, Please DM me too. My post didnt get past moderation for that reason.
john9101
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@mortdiggiddy, I took profit mid day on my tech shorts.
I think a bounce happens Tuesday at open and continues into another decline. You mentioned there being a bounce. How long in your opinion would this bounce last? As of right now considering buying puts on QQQ, ZM, NVDA, and CRM at open tuesday.
Obviously I know you don't have a crystal ball but wonder what you think on the technicals about a bounce ending Tuesday
Zen-Trades
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I am interested in your dark pools. It is not something I came across before but certainly I see how it can play a big part in the market.
I'm still holding stocks.
I don't understand why people sell everything in the index, I feel Amazon and Walmart as essential and dominant services/stores would be a good hold.
I feel like such an idiot for not listening to myself on so many occassions. But I lack self confidence.
Everyone I talk to still says rebound today.
I don't know why they're so optimistic all the time.
I was pessimistic most of this bull market but they finally converted me with the fed inflation announcement. My best friend yelling its amazing news lady dah. I went almost all in, I saw a good week? Of upside then was panicky on Tuesday now boom.
Still don't know what to do, everyone says hold, I say, 30% down to go.