Stocks Crash As Investors Dash For Cash

This morning, White House advisor Larry Kudlow put a damper on hopes of a stimulus deal before the election, when he mentioned there are a number of demands from Pelosi and the democrats that Trump simply can't accept.

Futures were already showing signs of weakness in early morning trading, before Kudlow's remarks, and stocks are now extending losses as we approach the afternoon session. The 50 day MA (340.21) was broken with conviction, but the bottom of the downward channel (in green), is holding up well as last resort support. We just broke below the 200 period MA (338.90), and if the bulls fail to keep us above this level today, I don't expect strong support until we hit the 100 day MA (329.76), which is also sitting right around the 21 week EMA (330). Vix up 15%, and has now broke above it's 200 day MA for the first time since mid-late September. Let's see how the day progresses.

I appreciate your time today guys! It should be an exciting day to say the least, so best of luck out there. Stay tuned for updates! Cheers, Michael.

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Comment:

Orbiting the 200 period MA on the hourly (338.90). No support above 335 on the hourly. Bulls need to hold the line here, or things could get ugly, fast...

Comment:

Just broke short-term channel support, and losing ground here below the 200 period on the hourly. It's not looking good for the bulls at the moment...

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Vix up 16% and sitting at the HOD (32). We're at the highest level since Sep 8th...

Comment:

DXY is up marginally on the day, but looking soft considering the majors are all down over 2%.

Comment:

Clear break below Channel Support, and losses are accelerating. Dow and Small caps are now down over 3%. SPY in no man's land, and searching for a home. 335 provides weak support, and as I mentioned earlier, a break below this level would take us to 330.

Comment:

SPY catching a bid here. We've been trending up on the 5 minute since around 1:30PM. Vix getting hammered, now back at 32.50, after hitting a 7 week high at 33.40. Bull trap/liquidity grab? Let's see if buy the dippers show up in the final hours of trade...

Comment:

Just hit the Channel around 338 as resistance, and got rejected. Let's see if polarity principle will hold up. If so, we'll see another leg down heading into power hour. Another retest of 335's could see a break below, taking us down to 330.

Comment:

Massive bid at 2:26PM broke us back into the channel with the highest volume print of the day. Bulls are sending a clear message to the bears that they have more fire power in the tank, and aren't afraid to use it. Bulls are not going anywhere...

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Apple and Amazon are down less than 1% today, while the majors are down 2-3%. Are these 2 stocks single-handedly holding the market up? Wacky index weightings aside, this farce has to end at some point...

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Since 2:30PM SPY has remained flat, while Vix has notably decoupled, and risen 2.6%. Vix is not buying the dip, at least for now...

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Volume is looking decent as we approach the close. We've now reversed all of the afternoon's losses. 200 period MA on the hourly (338.83) is now acting as intraday resistance. It's important to note, the bulls successfully broke us back above Channel resistance at 338, and we're trading in a tight range heading into the close. If we lose the channel again, I expect to see bearish price action into close, potentially back down to the 335 level. We would need a break above 340 to recapture the 50 day MA, and potential further upside...

Comment:

A bearish day for global markets, and the US was no exception. It was a bullish close, though, all things considered. After losing the 200 period MA on the hourly, and breaking below channel support, the bulls were able to successfully get us back above these key supports before the close. Vix got hammered into the close, and we ended the day around 32.30 after hitting a 7 week high at 33.70. Short vol looks like the most popular trade on the Street again.

This is peak earnings week (40% of the S&P reporting), so keep an eye out for your favorite stocks quarterly performance, and I look forward to seeing you guys tomorrow for another exciting day of price action. Have a great night! Cheers, Michael.