What is more extreme than the rally we've observed off this year's low?
Vix has declined sharply, in a steady pace, making fresh quarterly lows, a strong level of complacency is observed, whilst the price action in the daily confirms we're due for a correction in equities.
This is clear in many large cap stocks, as well as observable in oil , which had led the market into this climb, after a coordinated effort to prop its price higher, weakening the dollar, which was weighing heavily on and after the Fed's attempt at normalization of interest rates, created a heavy correction accross the board.
Currently, the short interest remains elevated, and we have signs of weakness in lower timeframes.
I'd reccomend going short, either via options, buying , yen, bonds, or shorting SPY or S&P500 (or CFDs).
The stop loss and entry, I will reserve for my signals group for the time being.
As a general guideline, when in doubt, go by (ergo, use to determine your stop distance).
If you have a suitable technical strategy to trade into this move, feel free to do so if you agree.
Downside is very appealing, considering the minimal upside risk we have here.
PS: Check my profile or pm me for information on trading signals or tuition.
(I'd estimate we'll see a violent move, which would wash out any kind of bullish sentiment from the masses, and then reverse up!)
All yen pairs in ugly consolidation, I am waiting for a pullback to the broken level on usdjpy, to go short. Might not get there really, after seeing the market being stuck in ugly range. I am short on audusd, will close half of the position before the cash rate news today. What do you think, is it better to leave it all open or cover some profit and run? hehe ;)