1. Vix spiking with increasing relative tops and relative bottoms 2. Put/Calls ratio going up and now around 2 (every 1 call there are 2 puts around)
Previous short squeeze, which caused innatural spike in S&P, is very well justified looking at quick covering of many shorts building up after August 11th shake
1929 is looming around the corner
See where we are at the end of the day.
Happy trading!
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Ok guys - here we go It's coming down Update the graph: 1. VIX through the roof 2. Put/calls up to three 3. Oil has never decreased that fast since April 2020 4. Bitcoin follows Now let's catch up with 1929 real quick Cheers
Hi @antrap77 im not sure why it got deleted as well, thanks for bringing this out!
Overall do i think there is much froth? Yes, but bond yields have been near zero as well. Low inflation + unprecedented money printing + shit bond yield = a perfect formula for stonks.
I say not by November because regardless of who is in control of Fed, definitely money will keep pumping and definitely there will be no increase in interest rates: who wants to stir shit up during election when times are already extremely volatile?
On the technical side, the recent rally to 3500 has indeed gained in strength (see RSI), muting any divergences previously observed, hence my take on why it will not be within 2020 as well.
Indeed I might start to cautiously enter short term bull-scalp positions within today or tomorrow, when previously i have liquidated at 3300 levels (missed the train dang!!!)
Cheers!
antrap77
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@poister198, agree with you when you say that we have the perfect formula for stock at the moment, but things went way out of hands here. P/E to the moon, tech stock doin +3% every day and so on
Too much hype for the recovery which is not real yet, and not even close. This is why I believe we need to still keep in close consideration the psychological aspects.
"Post Sharp Drop" euphoria is now coupled with ".com 2.0" mania and this is probably the main reason this rally is still lasting. Some kind of 1929 + 2000 which will lead to some even worst dump !
If you are fast enough you might still catch the last leg of the .com 2.0 mania but as I described I believe that shaping forces of the next drop are already taking shape - VIX still up and now EUR/USD dropping...but let's see if some other indicator joins the party by tomorrow.
Thanks again for your inputs!
antrap77
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Pasting here a comment from @poister198 which I got via email but not showing here (not sure why...)
-quote
Hi @antrap77 have been following a while, but really i think the comparison has failed, showing that the psychology is different already. Just by chart, the divergence from the 1929 chart since 20-21 Aug had confirmed the invalidation.
The slight pullback yesterday is more likely an attempt by bears entering shorts rather than holders selling off, hence a weak pullback. Still think that it might drop but definitely not within 2020, and no way in hell before November.
Stay safe!
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Thanks @poister198 for commenting. My deadline for invalidation is tomorrow, which corresponds to the first relative bottom in 1929. Will be reviewing the analysis but will take today as an extra day to see further developments.
I agree that the two models are now distant but such distance in prices was showing up also in the past months at some stage.
I still see increase in VIX as a result of the same psychology so we will see the effects shortly.
In 2008, Election year, there was a big drop in August until November...why would you think this could not happen this year? Tighter control of Trump administration over the FED?
Overall do i think there is much froth? Yes, but bond yields have been near zero as well. Low inflation + unprecedented money printing + shit bond yield = a perfect formula for stonks.
I say not by November because regardless of who is in control of Fed, definitely money will keep pumping and definitely there will be no increase in interest rates: who wants to stir shit up during election when times are already extremely volatile?
On the technical side, the recent rally to 3500 has indeed gained in strength (see RSI), muting any divergences previously observed, hence my take on why it will not be within 2020 as well.
Indeed I might start to cautiously enter short term bull-scalp positions within today or tomorrow, when previously i have liquidated at 3300 levels (missed the train dang!!!)
Cheers!