Most devastating bearish setup in history (Part 2)
Since my original post on this bearish scenario, the market has chopped up and down for weeks and finally there has been a stronger move up over the past two days. However... those moves were primarily gaps formed in the future's market which do not provide strong support. The technical TRIN and PCC readings I have been following to identify the true bottom have still barely budged, indicating buy-the-dip sentiment is still very high and limited number of bears on board, although that base is growing now. On top of all this, volatility has barely budged despite some of these rip-your-face apart rallies. Therefore, I continue to position for a much deeper downside target, always giving enough time to ride through intense but short lived bear market rallies. Now I have broken up the possible elliott waves we may encounter in the following weeks.
Intermediate Bottoming Target: 1650-2050, Mid to end of April
Final Bottoming Target: 666-1250, End of June
Good luck to all!
Intermediate Bottoming Target: 1650-2050, Mid to end of April
Final Bottoming Target: 666-1250, End of June
Good luck to all!
Trade active:
TRIN 1.63, PCC 0.9 at the close
Strong bearish reversal today. However, the SPY P/C is getting bearish (1.34). This usually means a strong gap down follow through is required to begin capitulation. The overall P/C is still more bullish than bearish continuing to indicate a strong and likely incorrect buy-the-dip sentiment. However, the TRIN shows that bears are catching on so any drop should now be extremely rapid. Adjusted my final bottoming target due to the sentiment changes.
Intermediate Bottoming Target: 1650-2050, Mid to end of April
Final Bottoming Target: 1250-1650, End of June
Strong bearish reversal today. However, the SPY P/C is getting bearish (1.34). This usually means a strong gap down follow through is required to begin capitulation. The overall P/C is still more bullish than bearish continuing to indicate a strong and likely incorrect buy-the-dip sentiment. However, the TRIN shows that bears are catching on so any drop should now be extremely rapid. Adjusted my final bottoming target due to the sentiment changes.
Intermediate Bottoming Target: 1650-2050, Mid to end of April
Final Bottoming Target: 1250-1650, End of June
Trade active:
No clear direction this morning. Will have to wait until sentiment signals become clearer.
Trade active:
The TRIN dropped to 0.6 and PCC to 1.0 this morning. VXX diverging from VIX and has already turned green. These are very bearish indicators. Capitulation could begin any time imho, so please be extremely cautious on longs, or prepare to short or get out of the market. I could be wrong but I read *extreme danger* ahead.
Comment:
The SPY p/c ratio just showed up and it is very elevated at 1.43. This raises the probability that we will just continue grinding sideways rather than any big move up or down. Back to the waiting game.
Comment:
We have some *very* mixed signals right now. Overall, the TRIN and PCC have not changed much, still suggesting people are in buy-the-dip mode. However bears really started piling on SPY puts this week. Today's options open interest max pain value sits *far* below at 262. However, the current options volume suggests pinning between 265 and 270 with a bias toward breaking the 270 side. That said, this options volume is fluid and it could all change by midday due to the intense buying happening all morning. Still just a waiting game.
Comment:
Today's close: TRIN 0.96 PCC 1.0 SPY PC 1.34.
Obviously capitulation has not started yet, so we may have to ride through yet another face-ripping rally. Long term, nothing has changed with respect to the TRIN and PCC bottoming indicators. However, I added the SPY put/call as a short term indicator. I wrote early this week that it was becoming too bearish and I think this short term bearishness must clear before the next down leg can begin. This means the SPY PC must drop and hold below 1.0. It's possible a double top was completed today as some stocks and indices broke yesterday's highs but others didn't. Big names like AAPL and BA were weak. Patience is required yet again.
Obviously capitulation has not started yet, so we may have to ride through yet another face-ripping rally. Long term, nothing has changed with respect to the TRIN and PCC bottoming indicators. However, I added the SPY put/call as a short term indicator. I wrote early this week that it was becoming too bearish and I think this short term bearishness must clear before the next down leg can begin. This means the SPY PC must drop and hold below 1.0. It's possible a double top was completed today as some stocks and indices broke yesterday's highs but others didn't. Big names like AAPL and BA were weak. Patience is required yet again.
Comment:
One more note, the 50% fibonacci from the entire drop is 279/280. Sometimes this level must be hit before the next down leg.
Comment:
Further analysis of today's action suggests market will at least hit the 50% fibonacci at 279 perhaps and begin the decline within 3 trading days. Strength of the decline, when it starts, should determine whether is will be capitulation or not. I think there is a chance that oil and the energy sector will have a spectacular fireworks rally before also joining the decline once the world recognizes that world leaders have jointly contributed to reducing oil demand by 80%.
Trade active:
Market is gapping toward the 50% fib target of 279/280 prior to this morning's open based on 6 million jobs lost and another round of wizardry by the FED. There is definitely increased risk in shorting at this point, so I do not recommend following unless you really know what you are doing. For safety, I disclose that most of my positions do not expire until sometime between September 2019 to January 2022, and that is why I can continue to wait out the rally waves. That said, I strongly believe the wizards will fail in their smoke & mirror efforts this time. Will update with more technical details later today. Good luck!
Comment:
My positions do not expire until Sept *2020* to January 2022 I mean.
Comment:
The gap rally seems incredibly powerful this morning, so if it does not head back down immediately, I see the rally taking us somewhere between 280-295.
Trade active:
All 3 of my indicators TRIN, PCC and SPY P/C have cleared of bearish sentiment. This would be the perfect time to top and drop now. We shall see.
Comment:
Looks like final insane pop toward 285/295 happening now. Should happen extremely quick making it almost untradeable, then reverse within 3 days.
Comment:
If we are beginning the descent then 264 from two days ago is *critical* support.
Comment:
Adding some crazy bearish math here just for fun. In the initial wave down, we lost 52+ weeks of gain in 5 weeks giving a fraction of 0.0961. Now we rallied for 3 weeks. If the capitulation wave powers down with equal magnitude, how quickly *could* this rally disappear? 3 x 0.0961 = 0.288 weeks or 1.44 trading days. Just throwing it out there for fun guys! We shall see what happens.
Comment:
TRIN has reached 2.2 now suggesting the bear army has arrived, likely heavy institutional selling. The selling *must* result in strong loss of price now or it will trigger the bottoming signal i have been looking for.
Comment:
TRIN 1.94, PCC 0.95, SPY P/C 1.24
TRIN shows some heavy selling appeared in the afternoon but market was resilient. Closing SPY p/c shows that there is still some bearish sentiment that needs to be erased, so likelihood is this rally continues. 283 is next potential top, then 295.
TRIN shows some heavy selling appeared in the afternoon but market was resilient. Closing SPY p/c shows that there is still some bearish sentiment that needs to be erased, so likelihood is this rally continues. 283 is next potential top, then 295.
Comment:
Thank for everyone for your interest in this post. I've never received so many comments before, so hopefully what I say is actually valuable. I have another piece of info to show you all. Please take a look at this F&G website: money.cnn.com/data/fear-and-greed/. You will notice there that most of the sentiment indicators are quite bearish with the exception of "safe haven demand" and "p/c ratio". One of the main reasons I am calling for further downside action is because I figure these are anomalies that to be "rectified" before we hit bottom, especially the p/c ratio. You will notice in p/c chart that we are already approaching levels of call buying enthusiasm equal to the January market peak, even though stocks have only recovered 50%. This suggests that once again there is an enormous mountain of money in call option premiums that need to be swiftly cleared out to prevent the mass from becoming rich. Also notice that we bottomed twice at a p/c level of only 1.2. This is not very bearish at all. If i recall correctly, at the Dec 2018 bottom (which was not nearly as powerful as the current drop), the P/C hit a level of about 2.0 on that chart before bottoming. Have a great Easter all!
Comment:
The ironic thing about Elliott waves is they typically "bottom" on bad news and "top" on good news. Last Friday, the banks were bailed out and today, on Easter Sunday, OPEC signed a historic deal to try and contain the damage inflicted on oil prices. Good or bad news? We can now only wait and see how the market reacts. I'm still a believer that this crash is far from over. Not just the FED, but *all* central banks have literally exhausted their entire arsenal within the first two months of covid 19 (wave 1 of 3). OPEC has also blown their limit implementing an all-out reduction. So, it begs the question? Will imaginary printed money counter the effect of 20+ million jobs lost and over a decade of financial engineering and blatant lying? Will a 10% cut in oil production counter an 80% decrease in demand? What happens when the natural second and third waves of a virus play out? These are the question we must seriously consider as the potential for the greatest economic crisis in history looms before us. Will we become the idiot bears who were wrong yet again, the sheep who are crushed by being ignorant about the real economic conditions, or the future leaders of the world? Best of luck this week, everyone.
Trade active:
This morning, all the criteria have been met to kick off the next down leg. TRIN, PCC and SPY P/C are all at elevated bullish levels. I have already added to my put positions. That said, for strong confirmation, we would like to see at least 2-3 red days and a quick break of the 264 level. I caught some suspicious activity late Friday afternoon which suggests heavy institutional selling was taking place. For example, the ETF ESGU posted a record 12 million shares in red volume and its value declined momentarily about 22% after hours. This leads me to believe we should see at least a drop that size in the coming days or weeks.
Comment:
I might be totally wrong and just being too bearish, but my spidey senses are telling me that *every* single bloated asset class out there is about the fall into the abyss: stocks, bonds, gold, silver, oil, cryptos, literally *everything*!!! The one single class that I have even the slightest bullish view on right now as I examine the charts is the USD (ie. UUP).
Comment:
SPY puts are still being bought at an elevated level now, although they are about equal to calls today. I think what is need for capitulation to begin is a closed around the put support levels of 270-272 then an overnight gap down to completely break the structure. My guess is the market wants to annihilate all the calls bought since the Mar 23rd low as well as most of the (weak) short dated SPY puts. Then the next bear leg down can begin.
Comment:
Nope, looks like more patience required still. AAPL is rallying hard. No capitulation yet.
Comment:
TRIN: 0.6, PCC 0.9, SPY P/C 1.15
Still no capitulation and still no change in the overall outlook. TRIN shows another day of enormous buying power used to prop the market up. PCC and SPY P/C are at potential turning levels, but another wave up is not out of the question.
Still no capitulation and still no change in the overall outlook. TRIN shows another day of enormous buying power used to prop the market up. PCC and SPY P/C are at potential turning levels, but another wave up is not out of the question.
Comment:
Looks like the relentless rally continues for the time being. Will bring one more technical piece into the light at this time, which is that the VIX monthly contracts expire early tomorrow morning. Since the rally has made it this far, the market is unlikely to change course until those contracts roll over. Another grit the teeth and be patient day for bears likely. Let the bullish sentiment continue increasing.
Comment:
Bears feeling like !@#$ yet? You are not alone! All major investing firms pretty much declaring the bear market over now. All my technical indicators suggest bearish sentiment has all but cleared and there are way too many calls in the market, which means the top is nearly in. HOWEVER, only the market will tell us who is right.
Comment:
Holding on now with all my courage now. May it extend to anyone following. I think that the final (hopefully tiny) Elliott subwaves just need to play out and then we shall see history in the making. Look to oil for the true and real picture.
Trade active:
TRIN: 2.2, PCC 1.0, SPY P/C 1.15 at today's close
Unfortunately, no top yet. Today was pretty much the same action as yesterday, except the TRIN was super elevated instead. What does that mean? Maybe lots of selling in the background, as opposed to lots of buying yesterday?! SPY P/C dropped to 0.85 early in the morning, but jumped as soon as the market dropped a little, again pushing the bearish sentiment up too high.
It's getting fairly close to a scary place for bears now. 2950 would be the next resistance. However, there are still many unhealthy signs out there. The big one is oil. The OPEC agreement was completely ignored.
VIX had a strange spike down to about 36.1 on March 24th. Could hitting that value be a sign for reversal?
Feels a bit like the Fall 2018 never ending rally now EXCEPT the 5 day average p/c ratio is already down to the topping value of 0.6.
I'll continue bravely (or stupidly) holding my positions. No confidence in the trend change after today's action. A 4-5% gap down would significantly change the view though. Good luck all!
Unfortunately, no top yet. Today was pretty much the same action as yesterday, except the TRIN was super elevated instead. What does that mean? Maybe lots of selling in the background, as opposed to lots of buying yesterday?! SPY P/C dropped to 0.85 early in the morning, but jumped as soon as the market dropped a little, again pushing the bearish sentiment up too high.
It's getting fairly close to a scary place for bears now. 2950 would be the next resistance. However, there are still many unhealthy signs out there. The big one is oil. The OPEC agreement was completely ignored.
VIX had a strange spike down to about 36.1 on March 24th. Could hitting that value be a sign for reversal?
Feels a bit like the Fall 2018 never ending rally now EXCEPT the 5 day average p/c ratio is already down to the topping value of 0.6.
I'll continue bravely (or stupidly) holding my positions. No confidence in the trend change after today's action. A 4-5% gap down would significantly change the view though. Good luck all!
Comment:
Further analysis of the market today suggests the market may be playing out a final ending diagonal pattern from the 'C' wave that started on Apr 1st. This would ideally end within the next three days and thrust quickly back toward the 265 and 245 levels. Despite today's rally, several critical sectors, namely XLF, XLI, XLE, and IYT failed to rally. This divergence another sign of weakness and, if not cleared up by tomorrow, could mark the top. Furthermore, metals reversed hard forming doji tops at the end of the day. Although many see gold and silver as a bear market hedge, they would actually be crushed alongside the market in a deflationary scenario, which is what I see. Also metals and bonds would be sold off early in the next sell-off wave to cover capitulation margin calls. Updating potential targets now based on the continued rally.
Intermediate bottom: 1650-2050, mid-may
Final bottom: 1250-1650, mid-July
Intermediate bottom: 1650-2050, mid-may
Final bottom: 1250-1650, mid-July
Comment:
Good morning all! Bears broke *huge* put support at 280 overnight. It is now very important that this level becomes resistance and the bulls do not break back above it today. TRIN is at 0.6 and PCC at 0.8 showing enormous buying efforts at the open. Do not doubt for a moment that the bulls and central bank wizards will not try to buy the dip back up until at least midday. Courage to us.
Comment:
If we really completed an ending diagonal topping pattern since Apr 6 last night, I would be extremely cautious buying any short term dips. In Elliott Wave theory, an ending diagonal break will typically retrace the entire move up (from 2650) within the span of the first wave, which lasted 2 days in this case. See the 1998 DOW ending diagonal image in this link as an example: lifestyletrading101....nd-ending-diagonals/
Trade active:
Closing values:
TRIN 1.16 => Selling pressure has started to increase near the top
PCC 0.99 => Overall market sentiment still slightly bullish but fear is growing
SPY P/C 1.6 => Short term day traders quite bearish, but market was able to hold near the put support at 276, so another gap down tonight would likely finish this bear market rally and create a swift decline toward the 265->245 levels within days.
Intermediate bottom: 1650-2050, mid-May
Final bottom: 1250-1650, mid-July
TRIN 1.16 => Selling pressure has started to increase near the top
PCC 0.99 => Overall market sentiment still slightly bullish but fear is growing
SPY P/C 1.6 => Short term day traders quite bearish, but market was able to hold near the put support at 276, so another gap down tonight would likely finish this bear market rally and create a swift decline toward the 265->245 levels within days.
Intermediate bottom: 1650-2050, mid-May
Final bottom: 1250-1650, mid-July
Comment:
Marking today as possible downtrend day 1 of 20 due to the action and technicals. Good luck all and have a great evening!
Comment:
No gap down yet so rally structure remains somewhat intact. Perhaps it needs to rise back to 2820 to further give false "hope". We shall see.
Trade active:
TRIN momentarily spiked to 4.5 indicative of institution selling at these topping levels. Adding more to my short-side positions.
Comment:
Look at the divergences today with respect to stocks, major and minor indices! If there was any moment in time to be poetic about possible history making in the stock market, I think it would be right now.
A moment of confusion
An unheard thundering deep below
Waves splatter about in all directions
What is happening?
Then it arrives
The quake that caused the tsunami
Arises
And the power of the waves
Invisible just moments before
Synchronize a
And sweep all but the best away
A moment of confusion
An unheard thundering deep below
Waves splatter about in all directions
What is happening?
Then it arrives
The quake that caused the tsunami
Arises
And the power of the waves
Invisible just moments before
Synchronize a
And sweep all but the best away
Comment:
Today's close
TRIN 1.22 => Continuous selling pressure for a 2nd day in a row
PCC 0.9 => Bullish speculation still rampant
SPY P/C: 1.3 => Today, the number itself is not as interesting as the graph on opricot. Near the end of the day, sentiment changed from heavy puts at 275 to extreme (150K+) calls at the 280 level. This may be a sign that tomorrow will be a significantly bearish day. (Remember... the market moves opposite extreme sentiments).
Bears "BEARLY" survived the end of day onslaught, but maintained the wall of resistance at 280 that was created yesterday. Patience still required as always. Good luck all!
TRIN 1.22 => Continuous selling pressure for a 2nd day in a row
PCC 0.9 => Bullish speculation still rampant
SPY P/C: 1.3 => Today, the number itself is not as interesting as the graph on opricot. Near the end of the day, sentiment changed from heavy puts at 275 to extreme (150K+) calls at the 280 level. This may be a sign that tomorrow will be a significantly bearish day. (Remember... the market moves opposite extreme sentiments).
Bears "BEARLY" survived the end of day onslaught, but maintained the wall of resistance at 280 that was created yesterday. Patience still required as always. Good luck all!
Comment:
Blast up after hours. May or may not mean anything. If we open below 80 then the downtrend scenario is still valid. If it opens way up high like where it is, then bears will be blown away yet again for another wave up. 295 next.
Comment:
Seems like there was some news of a potential treatment against COVID-19 from Gilead. The spike up after hours now looks to be extreme. Based on this, I have to concede that, depending on whether the news is still real or misleading by morning, the entire scenario may shift by tomorrow.
Comment:
Would just like to add that if my bearish scenario is wrong, then the bottom we hit could possibly have been the end of a megaphone 4th wave that started on Jan 2018, and we would now be heading up for the final 5th wave.
It seems unlikely to me because it means the 'E' wave of the megaphone was *extremely* short compared to the Jan 2019-Feb 2020 'D' wave.
Never stay locked to a single view though. We shall see in the morning.
It seems unlikely to me because it means the 'E' wave of the megaphone was *extremely* short compared to the Jan 2019-Feb 2020 'D' wave.
Never stay locked to a single view though. We shall see in the morning.
Comment:
For the continued bearish side...
There is an obvious gap up in the Russell future's ticker. These are generally wrong 99% of the time.
Oil is not buying into this rally.
I'll leave it at that and we'll all see how things play out tomorrow.
There is an obvious gap up in the Russell future's ticker. These are generally wrong 99% of the time.
Oil is not buying into this rally.
I'll leave it at that and we'll all see how things play out tomorrow.
Comment:
Ouch, that pop really hurt.
But why is the market and oil diverging 180 degrees here?
A lot of top traders I follow are also seeing this as a fake rally.
Therefore, I will stick to my technical trading and hold on for dear life here.
I look at my positions and see that they are still far far out in the future.
Sometimes we must push through the pain to win, and I think this is one of those moments.
But why is the market and oil diverging 180 degrees here?
A lot of top traders I follow are also seeing this as a fake rally.
Therefore, I will stick to my technical trading and hold on for dear life here.
I look at my positions and see that they are still far far out in the future.
Sometimes we must push through the pain to win, and I think this is one of those moments.
Comment:
Also why is the king pin AAPL down 1% in the pre market?
Comment:
TRIN is at 0.86 => Buy the dippers continue
PCC is at 0.86 => Speculative buying returns to extreme greed levels
SPY PC is at 1.21 => Short term etf bears still creating a block for any huge downside action at the moment. Huge put support back at 280 today. Pin at 285.
The expectation is that we remain between 280-285 range today. However, if my kiss of death theory is correct, the momentum that the next downside wave should carry could break any put support levels. If I'm wrong... and that probability is still low imho based on other things i see in the market... then we're going up again!
PCC is at 0.86 => Speculative buying returns to extreme greed levels
SPY PC is at 1.21 => Short term etf bears still creating a block for any huge downside action at the moment. Huge put support back at 280 today. Pin at 285.
The expectation is that we remain between 280-285 range today. However, if my kiss of death theory is correct, the momentum that the next downside wave should carry could break any put support levels. If I'm wrong... and that probability is still low imho based on other things i see in the market... then we're going up again!
Comment:
Folks, I may be slightly premature, so please watch with your own confirmation methods before taking action, but I think the top may be in. For myself, if AAPL breaks 279 and SPY heads toward 280 today then the entire market becomes a strong sell signal. Good luck!
Comment:
AAPL has broken the 279 support level a couple times now. Not officially *smashed* yet but getting there. What needs to happen now to initiate the strong downside thrust? I think we need to see buy-the-dippers purchase a HUGE swack of calls to derail the put wall at 280. We shall see.
Comment:
AAPL officially broke support now. What is next to look for?
What I call the PHOENIX (VIX) needs to go green and rise to sky once again.
Red candles of unimaginable enormous size.
Hopefully, morning gap up rebounds to be quickly crushed after European close time.
This is my experience trading capitulation waves and I hope it serves you all well if this happens. Good luck all!
What I call the PHOENIX (VIX) needs to go green and rise to sky once again.
Red candles of unimaginable enormous size.
Hopefully, morning gap up rebounds to be quickly crushed after European close time.
This is my experience trading capitulation waves and I hope it serves you all well if this happens. Good luck all!
Comment:
VIX unable to take off unfortunately. So another weekend of grind likely. :(
Comment:
TRIN 0.74 PCC 0.9 SPY P/C 1.15.
Sentiment signals still seem overly bullish yet the SPY P/C cannot clear, so I have to say it could just keep rallying. I am personally still short but it is getting mighty dangerous now. Overall conditions have not changed. OIL still capitulating and now AAPL is starting to head down, but unfortunately, the overall market seems desynced. Will the FED win again with its lies? I don't know.
I would not recommend adding any shorts at this point.
The signal I am now looking for now is the VIX to clear 42.5. If it gets above that then there may still be a chance for capitulation. If it continues to drop from here though, I think it may be time to cut losses. :(
Sentiment signals still seem overly bullish yet the SPY P/C cannot clear, so I have to say it could just keep rallying. I am personally still short but it is getting mighty dangerous now. Overall conditions have not changed. OIL still capitulating and now AAPL is starting to head down, but unfortunately, the overall market seems desynced. Will the FED win again with its lies? I don't know.
I would not recommend adding any shorts at this point.
The signal I am now looking for now is the VIX to clear 42.5. If it gets above that then there may still be a chance for capitulation. If it continues to drop from here though, I think it may be time to cut losses. :(
Comment:
We always need an exit target with these types of strategies. Unfortunately, if this is just a very powerful bear market second wave rally, you never know exactly when it might end. Therefore, I am going to make a VIX target of 32.5 as my signal to cut losses. At the point it would break a very important structure which I will write about next.
Comment:
Hang in there bears! While doing some research this evening, I found a potential AAPL dark pool print with a low of 203.91 from Apr 16 AHs. That value is close to a 30% drop from here, so it is very possible we could see that target hit along with the start of the next market crash by May 1st.
I am not making this up. These were the last two times I saw such dark pool prints:
Feb 20: AAPL at 320, saw DP low of 255, target hit on Feb 28
Mar 19: AAPL at 245, saw DP low of 205, target nearly hit (215 low) on Mar 23
I am not making this up. These were the last two times I saw such dark pool prints:
Feb 20: AAPL at 320, saw DP low of 255, target hit on Feb 28
Mar 19: AAPL at 245, saw DP low of 205, target nearly hit (215 low) on Mar 23
Comment:
I still believe my long term perspective on the market is correct, even though this rally has been gut wrenchingly powerful. So far, oil future's is down 20% overnight. Perhaps the reality of a -80% drop in demand is finally sinking in. Will such a drop in oil impact the market? Seems like it should, but we shall see.
I figure I will perform a more cautious analysis this week. As stated above, I uncovered an interesting (possible) darkpool print low on AAPL of 203.91. My partner also found a similar print around $146 for MSFT. These are both -30% from where these stocks sit, so they will likely play out. However, I also found another (possible) darkpool on the SPY at 303, so perhaps the rally has one more short squeeze before the big drop.
I'm still not a strong believer in further upside from here though, so I will continue adding puts everyday (out to July expiry at least) whether or not 303 is hit. Good luck to you all this week!
I figure I will perform a more cautious analysis this week. As stated above, I uncovered an interesting (possible) darkpool print low on AAPL of 203.91. My partner also found a similar print around $146 for MSFT. These are both -30% from where these stocks sit, so they will likely play out. However, I also found another (possible) darkpool on the SPY at 303, so perhaps the rally has one more short squeeze before the big drop.
I'm still not a strong believer in further upside from here though, so I will continue adding puts everyday (out to July expiry at least) whether or not 303 is hit. Good luck to you all this week!
Comment:
Holy smokes! Good morning bears! Glad I slept in peace last night after posting with some confidence.
ES broke initial support overnight
Oil hit the 3rd wave target I posted about TWO days ago in a single session
VIX broke the upper wedge resistance overnight
Now we shall have to wait until sentiment technicals appear and if this down leg FINALLY starts.
I'm quite confident we shall have a good 14-30 days to trade the downside once it begins. At the same time, I'm also confident the FED will eventually pull out its last hidden weapons: negative interest rates and direct BUYING of stocks, so be prepared. Their naive sense of heroism will drive the world economy into a spiralling debt that we and our children's generation will pay dearly for, so we might as well load up our millions $$$ now before it is too late.
Good luck all!
ES broke initial support overnight
Oil hit the 3rd wave target I posted about TWO days ago in a single session
VIX broke the upper wedge resistance overnight
Now we shall have to wait until sentiment technicals appear and if this down leg FINALLY starts.
I'm quite confident we shall have a good 14-30 days to trade the downside once it begins. At the same time, I'm also confident the FED will eventually pull out its last hidden weapons: negative interest rates and direct BUYING of stocks, so be prepared. Their naive sense of heroism will drive the world economy into a spiralling debt that we and our children's generation will pay dearly for, so we might as well load up our millions $$$ now before it is too late.
Good luck all!
Comment:
Scanning for bear market 2nd wave topping sentiment now. The PC is very near Dec 3 2018 levels now, so perhaps another 1-3 days before capitulation really begins. Adding still more puts here and hanging on to all my open positions.
Comment:
Oil down 52% and is lower than 1986 lows. Hmmm... everything fine an dandy. La dee da! (Actually... I'm buying more puts.)
Comment:
Was curious to see where exactly we are in oil price history. See for yourselves...
www.macrotrends.net/...-price-history-chart
www.macrotrends.net/...-price-history-chart
Comment:
Gotta say the red candle on oil today is longer than most of my REAL LIFE birthday candles.
Comment:
Was trying to be cautious this week and seeing the bullishness in the market, but no cigar. Just learned of a 500 MILLION block sale on SPY... holding holding... just need patience.
Comment:
Opricot SPY p/c volume looks completely whacked today. Normally with the puts so high, I would say the day should be bullish. BUT... why does it look like a PUT MOUNTAIN rather than a put spike?!?!
Comment:
I thought most oil & gas companies said they would go broke at $15 per barrel? Where are we right now? $2.25. Bull market still intact though... hmmm...
Comment:
How many pieces can we take out of this JENGA stock market before it crashes. Very good point. Let us start the game then.
OIL destroyed
VIX resistance broken
SPX broke wedge support last week and making kiss of death
ES broke wedges support this morning
IYT broke wedge support
AAPL sick and weak
OIL destroyed
VIX resistance broken
SPX broke wedge support last week and making kiss of death
ES broke wedges support this morning
IYT broke wedge support
AAPL sick and weak
Comment:
XLE kiss of death
XLI kiss of death
XLU broke wedge support today
XLI kiss of death
XLU broke wedge support today
Comment:
Watch now as they miraculously close this day green.
Comment:
Bearish technicals: SPY support at 283. VIX at 42.5. Either of those levels need to break strongly for bear market continuation. AAPL darkpool low of 203.5 and MSFT 146 registered a couple days ago.
Bullish technicals: SPY 305 dark pool high observed a few days ago.
Good luck to you all!
Bullish technicals: SPY 305 dark pool high observed a few days ago.
Good luck to you all!
Trade active:
At today's close
TRIN 0.8: Bulls still buying the dip
PC 0.8: Speculators still buying the dip; dropped to levels around the Dec 3 2018 market top (just before that 3 week crash) earlier in the day.
SPY P/C 1.95: Elevated value usually indicates a bullish day, but the volume chart looked whacked and bears pushed straight through the put wall anyway. This is typical topping behaviour.
I give it 60% likelihood that the downtrend has resumed after today's action.
SPY must breech 280 next and VIX must stay tight above 42.5.
Other notes: oil devastated and lots of enormous dark pool selling activity happening in secrecy
TRIN 0.8: Bulls still buying the dip
PC 0.8: Speculators still buying the dip; dropped to levels around the Dec 3 2018 market top (just before that 3 week crash) earlier in the day.
SPY P/C 1.95: Elevated value usually indicates a bullish day, but the volume chart looked whacked and bears pushed straight through the put wall anyway. This is typical topping behaviour.
I give it 60% likelihood that the downtrend has resumed after today's action.
SPY must breech 280 next and VIX must stay tight above 42.5.
Other notes: oil devastated and lots of enormous dark pool selling activity happening in secrecy
Comment:
Good morning all! Overnight action further increases likelihood of bear market downtrend continuation. Pretty much *all* the major indices have broken wedge support now. This morning some important stocks like AAPL, BA, and TSLA are testing their corresponding wedge or triangle supports. Yesterday's historic drop in oil price continues today, pretty much confirming that we HAVE ENTERED a deflationary environment. There are those that still believe in the FED, but I do not believe for one moment that a corrupted human force like that can battle both the natural forces of coronavirus and deflation simutaneously.
For those who have been engrossed in this bull market for too long, let me remind you what happens in bear markets and deflationary environments.
a) Any rally will eventually be sold off at devastating speed
b) supposed safer asset classes like metals, miners and bonds typically also crash with stocks eventually
c) the dollar usually becomes the only safe asset class
d) newest "speculative" asset classes like biotech, tech, and crypto will likely tank the fastest once the atmosphere sets in.
Good luck to all. I will keep updating with daily technical details as long as there is POSITIVE interest and discussion.
For those who have been engrossed in this bull market for too long, let me remind you what happens in bear markets and deflationary environments.
a) Any rally will eventually be sold off at devastating speed
b) supposed safer asset classes like metals, miners and bonds typically also crash with stocks eventually
c) the dollar usually becomes the only safe asset class
d) newest "speculative" asset classes like biotech, tech, and crypto will likely tank the fastest once the atmosphere sets in.
Good luck to all. I will keep updating with daily technical details as long as there is POSITIVE interest and discussion.
Comment:
Next important technical support levels are 267 (10 year support) , then 256.
Comment:
Today is still early in the drop sequence so i expect bulls will be buying the dip in a frenzy. Would not be surprised to see a gap fill up to the 278-280 levels until about midday before the drop resumes. I do not like day trading at short intervals, so I will let these rallies go.
Comment:
Currently there is no concern whatsoever about this drop. TRIN humming along at 0.75 and PC at 0.95. That is good news for us bears.
Comment:
Mighty tech (XLK) and biotech (XBI) have also broken their respective wedges now. Not many pieces left to our jenga tower. I call 75% chance of bear market continuation now.
Comment:
I see two potential bearish paths from here:
(1) Back to 282 to fill the gap, then resume downtrend
(2) Continue dropping straight down with pitstops at 268, 255 and 235.
50/50 chance for either path so i hold my postions.
VIX rising strong above 48 is key to continued downtrend.
(1) Back to 282 to fill the gap, then resume downtrend
(2) Continue dropping straight down with pitstops at 268, 255 and 235.
50/50 chance for either path so i hold my postions.
VIX rising strong above 48 is key to continued downtrend.
Trade active:
At the close today:
TRIN 0.67 => Bulls STILL buying the dip, even more so than yesterday. No fear.
PCC 0.95 => Bullish speculation still exceeds bearishness. No fear.
SPY PC => Irrelevant today as it's not options expiry, but tomorrow the value is 1.3 with a huge put wall at 270 and not much call resistance. As such 270 is an important level to breech quickly.
VIX rising strong above 48 is still key to continued downtrend.
AAPL darkpool low of 203.5 and MSFT 146 are potential key intermediate bottoming levels.
TRIN 0.67 => Bulls STILL buying the dip, even more so than yesterday. No fear.
PCC 0.95 => Bullish speculation still exceeds bearishness. No fear.
SPY PC => Irrelevant today as it's not options expiry, but tomorrow the value is 1.3 with a huge put wall at 270 and not much call resistance. As such 270 is an important level to breech quickly.
VIX rising strong above 48 is still key to continued downtrend.
AAPL darkpool low of 203.5 and MSFT 146 are potential key intermediate bottoming levels.
Comment:
Possibly scenario (1) described above playing out. Just sitting and waiting now.
Trade active:
TRIN 1.2 => Slightly elevated selling today while the market rose. No biggie.
PCC 0.77 => Bullish speculation at extreme again... very close to Dec 3, 2018 level just before that 3 week capitulation started
SPY PC 1.5 => Too bearish today so market was able to rally short term
Scenario (1) playing out as expected right now. We have completed a perfect H&S now and can reverse mathematically 25 points in the other direction to enter the 265 zone as early as tomorrow. If we exceed 285 then something else is likely at play.
VIX rising strong above 48 is still key to continued downtrend. It looks like we are at the equivalent point of Feb 21st, just before VIX gapped up and devastated the market for 17 days.
AAPL darkpool low of 203.5 and MSFT 146 are potential key intermediate bottoming levels.
PCC 0.77 => Bullish speculation at extreme again... very close to Dec 3, 2018 level just before that 3 week capitulation started
SPY PC 1.5 => Too bearish today so market was able to rally short term
Scenario (1) playing out as expected right now. We have completed a perfect H&S now and can reverse mathematically 25 points in the other direction to enter the 265 zone as early as tomorrow. If we exceed 285 then something else is likely at play.
VIX rising strong above 48 is still key to continued downtrend. It looks like we are at the equivalent point of Feb 21st, just before VIX gapped up and devastated the market for 17 days.
AAPL darkpool low of 203.5 and MSFT 146 are potential key intermediate bottoming levels.
Comment:
Market filled the gap from Monday night's drop. Very important now how things play out. I think if the picture really has switched bearish in the short term, then market will need to reverse hard between 282-285, otherwise the rally may still be incomplete.
Trade active:
TRIN at 0.65
PC hit lowest level yet 0.62
Weaker bears getting scared out of their positions.
Seeing that speculative bullish sentiment is getting so extreme, I continue holding. Adding a whole ton of vxx lottery calls here between May and July.
Good luck to anyone still a bear!
PC hit lowest level yet 0.62
Weaker bears getting scared out of their positions.
Seeing that speculative bullish sentiment is getting so extreme, I continue holding. Adding a whole ton of vxx lottery calls here between May and July.
Good luck to anyone still a bear!
Comment:
Cannot say for certain if we have topped yet BUT if we have, the next fibonacci downside target should bring us to about 2600 before the next significant rebound.
Comment:
Leaked news from GILD may have been a downside catalyst and suggest the downside velocity when it arrives. Market dropped 1.5% in less than 5 mins, completing an elliott impulse structure, and is now rebounding. Situation is still neural until there is further confirmation. If we drop below 278 today, it is not implausible to consider the 1.5% / 5 min drop velocity will be sustained.
Comment:
Downside velocity trajectory calculation:
Assuming 1.5% per hour (rather than 5 mins).
22% to bottom
22 / 1.5 = 14.67 hours = 2.5 trading days.
Double this as a rule of thumb.
We should be back to sub 2250 within 5 days if math prevails here.
Assuming 1.5% per hour (rather than 5 mins).
22% to bottom
22 / 1.5 = 14.67 hours = 2.5 trading days.
Double this as a rule of thumb.
We should be back to sub 2250 within 5 days if math prevails here.
Trade active:
Both TRIN and PC closed around 0.75 today. This continues to suggest overly bullish sentiment that will soon be wiped clean.
The close was bearish but there is strong SPY put support at 275 tomorrow. Therefore, to continue at the trajectory indicated above, we must gap through 275 tonight. I further analyzed some other charts, and it is more likely it will take 7 trading days to return to the 2150 level, so May 1st would be a good initial target.
Updating target dates now:
VIX exceeding 48 is still an essential for capitulation to happen.
Intermediate bottom: 1650-2050, May 14-19
Final bottom: 1250-1650, mid-July
The close was bearish but there is strong SPY put support at 275 tomorrow. Therefore, to continue at the trajectory indicated above, we must gap through 275 tonight. I further analyzed some other charts, and it is more likely it will take 7 trading days to return to the 2150 level, so May 1st would be a good initial target.
Updating target dates now:
VIX exceeding 48 is still an essential for capitulation to happen.
Intermediate bottom: 1650-2050, May 14-19
Final bottom: 1250-1650, mid-July
Comment:
No change in outlook. Drugged up market that magically stays levitated and continues to suck in all the bulls. If this sideways grind keeps up, we will be moving into a 37 day down cycle next, rather than the 20 day one I believe we're currently sitting in.
Comment:
Even though indices seem to be doing squat doing, individual stocks definitely seem to be at a trend change pivot.
Comment:
Significant call wall just appeared on the opricot SPY options volume at 280. The market is cleared to tank now due to the overly bullish sentiment in every technical category.
Comment:
Not looking good now. Too many bears entered. Prepare for potential end of day ramp up.
Comment:
Greatest battle yet. Gotta be honest and split the view here now. 305 would be the final possible bear rally target before this becomes a bull market again. Technicals are not strong in either direction today so it now becomes a 50/50 gamble unfortunately.
Comment:
To continue in the bearish direction we would need to see a reversal like yesterday very soon.
Comment:
At today's close TRIN 1.5, PCC 0.89, SPY PC 1.56
Day of uncertainty. Overall sentiment and p/c buying at 0.89 still seems overly bullish and calls need to wiped out soon. Yet, downside momentum cannot ignite and feels like Fall of 2019 all over again. Still holding my positions for now, but gotta admit it seems like a 50/50 gamble now. Market needs to show its real hand.
Day of uncertainty. Overall sentiment and p/c buying at 0.89 still seems overly bullish and calls need to wiped out soon. Yet, downside momentum cannot ignite and feels like Fall of 2019 all over again. Still holding my positions for now, but gotta admit it seems like a 50/50 gamble now. Market needs to show its real hand.
Comment:
Feeling a bit discouraged today, but after scanning through the bigger picture, I see that 50% of the sectors have already closed 1-3 weeks in the red. The three leading sectors XLE, XLF and IYT are leading the way down with 2 to 3 weekly red candle closes. It's just a matter of time now.
Comment:
So, just a little encouragement to the other bears who may feel like me this week... look at the EWZ chart. 24 days of corrective rally gone in 2 days. That is the way of the bear.
Comment:
Next week's movement should be very important in determining whether or not my view holds or not. AAII released their latest sentiment report and bearish sentiment now stands at 51%. Many people believe this level of bearishness is a sign for reversal to ATHs or continued sideways action. However, my research suggests this could also just mark the beginning of a prolongued bear market. Unfortunately, nobody has a crystal ball and it depends largely on belief of which part of the overall Elliott cycle we have reached. For me, the data suggests we are entering a downtrend that is GREATER in degree than the 2000-2008 financial crisis' and perhaps even GREATER in degree than the depression of 1929. Hence, this is why I hold my bearish view for the time being. As I have stated over and over, the bullishness in speculative P/C ratio does not match the overall bearish sentiment, and should soon lead to a vicious clearing of all call options bought since the March 23rd lows. It is possible that we topped Apr 24th and have formed the first down/up waves into Friday. This week then should start with another down/up wave into the FOMC meeting Wednesday, when the crash should accelerate... if I am correct...
Comment:
One final comment that I neglected to mention is that during the 1987 and 2008/2009 crashes, the same AAII bearish sentiment rose to a whooping 70% before the market bottomed.
Comment:
Abracadabra!!! Is the FED succeeding in yet another miracle market levitation, or is this the last gasp before the plunge?
Hmmm... a 22.5% pre-market drop in oil seems to suggest that, at the very least, another great battle is about to ensue.
Technically unfortunately we are still stuck in neutral zone, burning options premium. Bears must steathily take out 272 sometime this week without overly increasing bearish sentiment. Bulls have a shot at 293, then 305... but those levels would still not justify a continued bull market.
I will pause from commenting until any of those levels are breeched, because it is just a waiting game otherwise.
Hmmm... a 22.5% pre-market drop in oil seems to suggest that, at the very least, another great battle is about to ensue.
Technically unfortunately we are still stuck in neutral zone, burning options premium. Bears must steathily take out 272 sometime this week without overly increasing bearish sentiment. Bulls have a shot at 293, then 305... but those levels would still not justify a continued bull market.
I will pause from commenting until any of those levels are breeched, because it is just a waiting game otherwise.
Comment:
One more for the books. Imagine dear chairman Powell's face this Wednesday when he tries once again to fraudulently convince the world that "everything is fine and under control" again while oil prices are sitting at -50$/barrel. Just imagine.
Comment:
Just a short update on sentiment technicals here.
PCC is at 0.745 and SPY P/C at 0.8 today indicating bearish sentiment has been cleared. This opens the door for reversal if the bears decide to take it.
PCC is at 0.745 and SPY P/C at 0.8 today indicating bearish sentiment has been cleared. This opens the door for reversal if the bears decide to take it.
Comment:
Anybody who is still holding short here certainly earns my respect for courage. We may now be classified in the realm of stubbornly stupid. However, due to the completely disconnect between the market, fundamentals (ie. job losses) and oil prices (another -10% today), as well as continued build in speculative bullish sentiment I am holding stubbornly at least until the outcome of this week's important earnings (AAPL, AMZN, MSFT, FB, GOOG) and FED meeting. Obviously, I am deep in the red now as the market continues to climb, but having positions out to 2022 and nothing that can put me into a margin call situation allows me to maintain some calm. Good luck all.
Comment:
And from the depths of the sea, the wave rises,
Having internal strength for weeks on end,
No ones sees it. No one knows it,
Until the tsunami rises with all its power,
And wipes clean all the useless junk on the beach,
In the blink of an eye.
Having internal strength for weeks on end,
No ones sees it. No one knows it,
Until the tsunami rises with all its power,
And wipes clean all the useless junk on the beach,
In the blink of an eye.
Comment:
Will resumes my updates now as it is possible we have topped once again; and what use is it to anyone if I post AFTER the drop has happened?
Summary
All bearish sentiments cleared.
If the spx 150 pt drop last week was a final 4th wave, then the first down wave should be about 3x that. So I'm expecting a continuous 450 pt drop at some point that will mark the start of the capitulation wave.
Obviously, if it goes up more, then we still have to wait.
Summary
All bearish sentiments cleared.
If the spx 150 pt drop last week was a final 4th wave, then the first down wave should be about 3x that. So I'm expecting a continuous 450 pt drop at some point that will mark the start of the capitulation wave.
Obviously, if it goes up more, then we still have to wait.
Comment:
I am repairing my damaged put positions July and further out at this point by adding to them.
Comment:
We may have topped today but would need another day or two of red candles to truly confirm. Short term bearish sentiment was all but wiped out with today's gap up and remained fairly low through out the day, despite the strong reversal.
I will have more conviction if we gap down toward 279 tonight, walk back up to 285 into the FED meeting tomorrow, then start acceleration into a 24 day market capitulation.
VIX rising back above 48 is still critical for capitulation to happen.
I will have more conviction if we gap down toward 279 tonight, walk back up to 285 into the FED meeting tomorrow, then start acceleration into a 24 day market capitulation.
VIX rising back above 48 is still critical for capitulation to happen.
Comment:
Still not topped yet. Still broken. Still waiting.
Comment:
I'm calling this for what I think it is: a complete final hoax rally.
Buying more puts here.
GILD spiked up on yet another hoax cure and spiked even lower than the Apr 16 leak, then formed another death star.
I don't believe an ounce of it.
Buying more puts here.
GILD spiked up on yet another hoax cure and spiked even lower than the Apr 16 leak, then formed another death star.
I don't believe an ounce of it.
Comment:
We just hit critical resistance that marks the Oct 3, 2018 top before the crash, the Mar 3, 2019 top, just before a significant pullback, and the Oct 3, 2019 resistance line, just before the magically Fall rally. I'm still skeptical how this could possibly rally further, but we are in a historic magic liquidity driven completely disconnected market now, so who knows.
Comment:
What is the difference between today and Jan 2019 that stops me from going long?
Jan 2019: Speculative average put call ratio was > 2.0
Apr 2020: Speculative average put call ratio is 0.7
Jan 2019: Speculative average put call ratio was > 2.0
Apr 2020: Speculative average put call ratio is 0.7
Comment:
Time to clean this market out, brothers & sisters.
Comment:
295 hit. 305 next. Wouldn't be surprised if it gets there at this point. No change in sentiment readings. The massive amount of speculative calls still need to be wiped out, but time is now being compressed so much that either I am wrong and the FED becomes the heroes this time, bringing the market back to ATHs, or the wipeout will be so fast that one would not want to blink when it happens.
Comment:
I still think patience will win in the end. Bear market rallies end with good news.
My belief now is that we are in a bear market that is 3.5x the magnitude of the 2008 financial crisis. The DOW dropped from Feb 12-Mar 23rd, creating a 28 day down cycle. Tomorrow marks the 28th day of the rally cycle. Bear markets have a pulse, a rhythm, and this 28 day metronome might be it. The market will have to prove it.
If I am correct, then this bear market should last 3.5x longer than the 2008 collapse. That lasted 17 weeks, so, this one will go on for 58 weeks, likely much longer than any trader here has witnessed.
My belief now is that we are in a bear market that is 3.5x the magnitude of the 2008 financial crisis. The DOW dropped from Feb 12-Mar 23rd, creating a 28 day down cycle. Tomorrow marks the 28th day of the rally cycle. Bear markets have a pulse, a rhythm, and this 28 day metronome might be it. The market will have to prove it.
If I am correct, then this bear market should last 3.5x longer than the 2008 collapse. That lasted 17 weeks, so, this one will go on for 58 weeks, likely much longer than any trader here has witnessed.
Comment:
Downside could be kicking off now, but still early to say for sure.
VIX broke out of an important double wedge structure as I posted earlier this morning.
The first downside move I expect should be about -450 spx handles once the big wave arrives. That's why I add puts at every potential top, because once that wave comes it will be late.
That said we still need at least 3 days of downside action for confirmation.
VIX broke out of an important double wedge structure as I posted earlier this morning.
The first downside move I expect should be about -450 spx handles once the big wave arrives. That's why I add puts at every potential top, because once that wave comes it will be late.
That said we still need at least 3 days of downside action for confirmation.
Comment:
All bearish sentiment cleared
TRIN 0.59
PC 0.78
SPY PC 0.94 + Zero put support under 290 for tomorrow's expiry.
Let's see if the market finally does its magic.
TRIN 0.59
PC 0.78
SPY PC 0.94 + Zero put support under 290 for tomorrow's expiry.
Let's see if the market finally does its magic.
Comment:
FYI, "bearish sentiment cleared" means market sentiment is no longer bearish enough to keep it afloat. It means there are so many bulls now expecting the market to continue rising that the market is very capable of doing the exact opposite. It is akin to the castle door being left ajar and bears can no seize the opportunity and crater it. This is not a given, but an opportunity.
Comment:
Bearish sentiment did not return at all throughout the day. TRIN, PC and SPY PC remained well below the neutral line of 1.0. In fact, options based bearish sentiment has pretty cleared out for the entire month of May. I don't have a crystal ball, but this is as good an indicator as we'll ever get as traders for resumption of the bear market. Price-wise we closed exactly at 290 which looked to me like the last standing put support for this week. If we gap down then I feel capitulation will begin. If we gap up or stay flat, then the battle rages on. Good evening all!
Comment:
Holding all shorts.
The foolish evening action is now followed up by even more foolish bullish early morning action.
Capitulation has begun imo. 85% confidence.
The foolish evening action is now followed up by even more foolish bullish early morning action.
Capitulation has begun imo. 85% confidence.
Comment:
Despite the gap down last night, sentiment has not budged much. The entire month of May is still open for a bearish invasion. Today, there is strong put support at 280, so I do not expect that level to be broken.
Could we bounce back up at this point? Anything is possible, but I doubt it. The bulls that bought relentless the last two days are, unfortunately, trapped I think.
Could we bounce back up at this point? Anything is possible, but I doubt it. The bulls that bought relentless the last two days are, unfortunately, trapped I think.
Comment:
Every single major index and sector has definitely dropped through wedge support from the Mar 26 lows now. NYA, SPX, QQQ, IWM, XLF, XLI, XLE, XLV, XLU, XBI, XLK... The last man standing surprisingly seems to be transport (IYT). I doubt it will hold up.
Comment:
If this jenga market holds up still, I will have to admit that that there are forces in this world greater than physics.
Comment:
Here is my take on how things might unfold folks. Since there is a heavy put wall at 280, the market will probably run down to that level to suck in overly enthusiastic (day-trading) bears, then ramp it back up to 285 to suck in the bulls again and keep the market sentiment optimistic.
THEN massive gap down over the weekend, just like Feb 21-24th.
Just my 2 cents. That's why if you're shorting with me, please BE WISE AND KEEP YOUR SHORT POSITIONS LONG TERM.
THEN massive gap down over the weekend, just like Feb 21-24th.
Just my 2 cents. That's why if you're shorting with me, please BE WISE AND KEEP YOUR SHORT POSITIONS LONG TERM.
Comment:
At today's close, TRIN was 1.4, PC 1.1 and SPY PC 1.4.
This shows short term bearish levels are beginning to rise, but FAR from any bottoming levels. I would say that downtrend probability is about 80% now and a follow through on Monday would completely confirm (for me) that the next leg of the bear market is underway. Today, the market sustained heavy damage from the gap down last night and was unable to recover at all. This is also a bearish sign.
If the bear market is to continue, I compute based on the last two days of action that this next leg down will be at least 1.5x the March drop. This would bring the SPX to the 2011 level of 1150.
This is what the data shows me folks. If there is continuation on Monday, then I will be creating a new post with a complete map of the bear market for everyone. Have a good weekend all!
This shows short term bearish levels are beginning to rise, but FAR from any bottoming levels. I would say that downtrend probability is about 80% now and a follow through on Monday would completely confirm (for me) that the next leg of the bear market is underway. Today, the market sustained heavy damage from the gap down last night and was unable to recover at all. This is also a bearish sign.
If the bear market is to continue, I compute based on the last two days of action that this next leg down will be at least 1.5x the March drop. This would bring the SPX to the 2011 level of 1150.
This is what the data shows me folks. If there is continuation on Monday, then I will be creating a new post with a complete map of the bear market for everyone. Have a good weekend all!
Comment:
Good morning everyone. Future's market broke fairly important support at 280 and seems to be testing it now. Many international markets broke initial technical support as well. Due to this downside continuation is highly probable already. If ES drops below overnight's low and VIX rises strongly above 40.5 then I would almost be certain that a ~28 day downturn cycle will take place.
Comment:
No confirmation yet today. Same criteria as I stated above holds for tomorrow.
Comment:
This morning's gap created bearish divergence in each of the future's charts and the p/c ratio gapped down to a new low since Feb of 0.62. Imo, it is an unsustainable rally that will wind this up for an even bigger drop with continuation of the downtrend already kicked off last Thursday to start in a day or two.
Comment:
Based on the sentiment readings, bears actually have the opportunity to drop this market into the 270s today... if they seize that chance.
Comment:
That's all folks!!! I believe we should be *very* close to top here. Sentiments are primed for a big drop. Oil near top. Global indices starting to fail. All US sectors have broken important wedge and today many of made the kiss of death. My toolkit also suggests a major turning tomorrow at noon. The first downside target should be sub 275 at which point I will create a new post to try mapping out the entire bear market.
I am personally 90% short with a minefield of puts spanning from mid-May to January 2022, heaviest positioning in the Fall of this year. That's how much I believe in what I write.
Good luck to all!
I am personally 90% short with a minefield of puts spanning from mid-May to January 2022, heaviest positioning in the Fall of this year. That's how much I believe in what I write.
Good luck to all!
Comment:
No important info from the overnight session. Perhaps 2-3 days of patience is still required. The bearish gateway in May still remains open and I know that today and Friday are possible major turn dates for the market.
Comment:
Wow! I am impressed. Bears managed to close it red AND below a very important significant support today. I am now 95% confident that the next down leg is about to begin. If we close red one more day, this will increase my confidence to 99%.
Let me share a trading secret with you all. Look up the symbol SPY on this website: www.opricot.com/tick...er/spy/optiongraphs. This is where I get important daily bull/bear trading sentiments. The most important graph to look at is the p/c options VOLUME on a given day. The chart gives very accurate probabilities of which direction the market could go on that particular day, especially expiry day: Mon, Weds and Fri.
Normally, when there are two spikes like today surrounding the current SPY price, it is NEARLY IMPOSSIBLE for the market to breech the higher of the two. Therefore, the higher probability went to the bulls today, but the nearly impossible happened. Even though there was an extremely heavy put wall at 286, the SPY breeched AND closed below that. To me this is a sign of healthy bearish strength.
Now if we pull up the same graph for Friday, you will see that the blue call of walls is very high compared to the red wall of puts. This means there are too many SPECULATIVE bulls on the scene who usually lose. Also, the first put wall at 285 was already breeched today meaning we are now entering a non-expiry day (Thursday) well under support levels for Friday.
Hence it is high probability that the crash wave begins tomorrow. We shall see.
Let me share a trading secret with you all. Look up the symbol SPY on this website: www.opricot.com/tick...er/spy/optiongraphs. This is where I get important daily bull/bear trading sentiments. The most important graph to look at is the p/c options VOLUME on a given day. The chart gives very accurate probabilities of which direction the market could go on that particular day, especially expiry day: Mon, Weds and Fri.
Normally, when there are two spikes like today surrounding the current SPY price, it is NEARLY IMPOSSIBLE for the market to breech the higher of the two. Therefore, the higher probability went to the bulls today, but the nearly impossible happened. Even though there was an extremely heavy put wall at 286, the SPY breeched AND closed below that. To me this is a sign of healthy bearish strength.
Now if we pull up the same graph for Friday, you will see that the blue call of walls is very high compared to the red wall of puts. This means there are too many SPECULATIVE bulls on the scene who usually lose. Also, the first put wall at 285 was already breeched today meaning we are now entering a non-expiry day (Thursday) well under support levels for Friday.
Hence it is high probability that the crash wave begins tomorrow. We shall see.
Comment:
Saved yet again by more magic overnight levitation.
Today would be equivalent to Feb 20th or 21st, so we are edging closer and closer toward the supposed capitulation date now.
One this this madness should end...
Today would be equivalent to Feb 20th or 21st, so we are edging closer and closer toward the supposed capitulation date now.
One this this madness should end...
Comment:
So, my confidence is reduced back to 85% now due to today's gap up.
However, this is what i see now. We have a massive number of call options since the March 23rd lows which would be profitable above 283. We have a large growing number of speculators expecting 295 by this Friday, and 300+ by next week. We have a limited number of bearish speculators between today and May 15th. We have rinse and repeated a cycle of late day drop, then gap up for several days now, etching that into the human psyche.
This is what a market that wants to cause the most damage could do now:
1) Repeat the same cycle today... grind up and drop hard near end of day, but instead of gapping up tomorrow (as most expect now), it gaps down hard, straight through the average call level of 283.
2) Then blast down hard until May 15th through all the put support levels below, toward 245/255 so that speculative bulls are wiped out and minimal number of bears can jump back on the ship.
3) Bounce back up around May 15th to strike out all the newbie bears and trap the bulls into thinking it is just a small drop again.
4) Capitulate into June
Just a guess today.
However, this is what i see now. We have a massive number of call options since the March 23rd lows which would be profitable above 283. We have a large growing number of speculators expecting 295 by this Friday, and 300+ by next week. We have a limited number of bearish speculators between today and May 15th. We have rinse and repeated a cycle of late day drop, then gap up for several days now, etching that into the human psyche.
This is what a market that wants to cause the most damage could do now:
1) Repeat the same cycle today... grind up and drop hard near end of day, but instead of gapping up tomorrow (as most expect now), it gaps down hard, straight through the average call level of 283.
2) Then blast down hard until May 15th through all the put support levels below, toward 245/255 so that speculative bulls are wiped out and minimal number of bears can jump back on the ship.
3) Bounce back up around May 15th to strike out all the newbie bears and trap the bulls into thinking it is just a small drop again.
4) Capitulate into June
Just a guess today.
Comment:
Market looks to be gapping up again with the overnight data. However, I still think the bears with the courage to stick through this will start to reap rewards soon. I am personally starting to take on losses now, but as I've indicated before, the core of my positions will be fine until September. Here is some "hope" that what I am saying is right direct from a phenomenal trader I follow:
"The markets have opened sharply higher the last 3 days. This means on extreme light volume a 'group' is using millions to bid the S&P futures up, then selling billions into them all day as markets close at the lows."
"The markets have opened sharply higher the last 3 days. This means on extreme light volume a 'group' is using millions to bid the S&P futures up, then selling billions into them all day as markets close at the lows."
Comment:
Massive short squeeze bear destruction rally on zero volume. Don't know what to say right, except that I am holding on for dear life, and the bullish signs are still all wrong. Need Thor's hammer about now.
Comment:
Well folks... as bullish as it seems again... all the technicals i monitor still look incredibly unhealthy. Most importantly the NYA had broken its wedge line sometime last week and it remains broken. Most of the other sector indices are in the same position, with only some barely hugging and kissing the bottom of the wedge for dear life. The only indices even close to making ATHs are XBI and XLK, and they have their weekly charts have a bearish divergence that looks horrible. I say it is still only a matter of time. Riding through the pain.
Comment:
Looks like final kiss of death should now be today or Monday. Hope they are not my famous last words. :)
Comment:
Another brutal day. I hear the outside world say, there are too many bears (50%). I hear them say there is too much short interest. Therefore, the conclusion is we will hit new ATHs shortly...
However, have they asked the question, why is the average p/c ratio still 0.7 if there are so many bears? Why are biotech and tech indices approaching ATHs, while financials and energy still near the crash bottoming levels? Why is the valuation of the nasdaq suddenly greater than ALL OF THE MSCI WORLD INDEX? Are the central banks really Gods of the market they 20% unemployment means nothing to the market?
I have many many doubts, but what else can I say when all technical and fundamental analysis seems to fail and the market continues to defy gravity?
However, have they asked the question, why is the average p/c ratio still 0.7 if there are so many bears? Why are biotech and tech indices approaching ATHs, while financials and energy still near the crash bottoming levels? Why is the valuation of the nasdaq suddenly greater than ALL OF THE MSCI WORLD INDEX? Are the central banks really Gods of the market they 20% unemployment means nothing to the market?
I have many many doubts, but what else can I say when all technical and fundamental analysis seems to fail and the market continues to defy gravity?
Comment:
I read lots of posts this week suggesting that there are too many bears at this point for the market to fall any further. These comments are based on the AAII investor sentiment paper which suggests bears are now at 50%. I found this interesting because it does not jive with the real-time market data I am seeing everyday, especially the speculative p/c ratios. Sure enough, there is more to this story.
I found this other interesting post by another experienced trader: twitter.com/yuriymat...1258901462299467776. It suggests that, yes, folks are feeling bearish, but no, they are not shorting according to the Rydex index. This research is confirmed by the firm www.yaseni.com.
So, based on this new info, I think continuing the bearish path is the right one. When the 50% bears really begin shorting, what do you think might happen? Blocks and blocks of call options still need to be wiped out.
I found this other interesting post by another experienced trader: twitter.com/yuriymat...1258901462299467776. It suggests that, yes, folks are feeling bearish, but no, they are not shorting according to the Rydex index. This research is confirmed by the firm www.yaseni.com.
So, based on this new info, I think continuing the bearish path is the right one. When the 50% bears really begin shorting, what do you think might happen? Blocks and blocks of call options still need to be wiped out.
Comment:
Completely absurd rally today showing the tectonic rift building between tech and all other stocks. Killing me watching this but the earth shattering quake that these two opposing forces are about to create will be worth it.
Comment:
Look at that candle on BTC and you will understand what earth shattering quake might mean.
Comment:
Market is overall still down since Apr 28th. 7 of the 10 sectors I monitor were down today. Divergence suggests a very shaky jenga puzzle now, and there is little doubt in my mind that the tidal wave is coming. How will this jenga stand up to it? Only a few more days I think, and we shall see...
Trade active:
Bullish speculation levels have now exceeded that of Apr 29th where most of the indices topped already. This is a strong bearish signal and could indicate that the downtrend is about to accelerate.
Comment:
Back to 90% downtrend confirmation. 99% when we break 272.
Trade active:
Transportation index (IYT) broke MAJOR support this morning. Now I am 95% confident in the downtrend. Will take a miracle for the bulls to make another rally high now. Good luck bears. I will post my bear market map if we break 272 as promised.
Comment:
Picture perfect close.
Comment:
Dear followers, I am moving the daily commentary to my latest post "Rhythm of the bear market (short term outlook)" so please go there moving forward if you are interested.