The S+P 500 has the potential to fall much further than expected. in sharp drop caused by price technically reentering the prior pattern.
I have been warning you of this possibility, since the sharp and unexpected break of S+P 3000 after the Fed meeting last week.
Shown here in clear triangle representation, you can see price reentering the prior technical triangle pattern BEFORE the upside breakout to all time highs.
In technical analysis, when such an event occurs, by invalidating the prior breakout to all time highs the reversal can then gain significant velocity on the downside, with surprising speed not seen by the crowd
For disclosure purposes,that break back into the prior pattern occurred when the S+P broke below 2937.50 -2940 on Friday an area identified with a parallel support trend line
My advise to investors and traders a like, is to get out of the way here. Downside risk is unknown at this point,
A massive bull trap has been sprung on the very complacent crowd, and they are not likely to suffer fools gladly, at this point.
Cries myself to sleep in after hours today* They got the bulls good today...currency manipulation and the markets tumble another 1.5% in AH.
David_Scott
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VIX is overbought...US markets are vastly oversold now...wicked bounce is coming. Exited all of my shorts at this point only in long positions and a short vix position.
David_Scott
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Closed a lot of my short positions...we're entering severely oversold territory at this point...market needs a relief rally. Probably not a new ATH but probably a pretty big bounce.
David_Scott
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Took longs today MSFT, SPY. Keeping swing shorts open on companies with a lot of China exposure. Shorted VIX today. BTFD crowd will likely come save the market at some point this week.
supere
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As I read this post, ES futures has already smashed all the way through 2895 with tremendous RSI strength on the month, weekly, daily and 4 hr charts. There is some bullish divergence on the hourly, but I'm afraid it will not last. The vix is poised to explode higher than the Feb and Oct 2018 peaks. I wonder if even the support at 2750 will hold?! Protect protect protect.
I trade VXX in the money options. The VXX rises when the market falls, so call options now. I'm hoping for a crash similar to Feb 2018. The VXX only goes so high, and then it reverses quickly. Call options now, but sell and reverse to put options if the VXX maxes out near 50. We'll see, I'm not convinced it's doing it yet, although it looks promising.
The signals I am seeing would indicate a few day bounce in the market, and then back down again. It does not look that way with the futures though. It seems almost too obvious that it's just going to tank downward. Expect the unexpected.
Spawn777
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@bkidd7, That's a european style option no? Be careful.
bkidd7
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@Spawn777, VXX is American style, I trade those options. They are highly liquid. I don't trade the VIX, because it's European style. I decided to mainly go long with SPY options for now. I'm guessing it's going up (a few days) before going back down. You may want to bet opposite of me though, LOL.