And some(market)body's lying.
So last week we did end up having a trendline break down out of the ascending triangle or wedge i had noted beforehand. (I had meant to do a post Thursday but was indisposed.) We then had a restest of the top trendline and subsequent (albeit unconvincing) failure, only to be whipsawed by the plunge protection team, or "they", in the last half hour of trading Friday.
*rant* And this is what i don't get - What the **** are they afraid of? It's like "they" had to eek out a daily/weekly gain so the financial media can print "New ATH's" again and again. Or it's just the algos in a perpetual stop hunt. And i'm not going to bend my brain on who "they" are as it literally could be the herd, or large institutions trying to keep this afloat, i honestly have no idea and frankly don't care. What i do care about is the divergences appearing in the market and the turn we're seeing into willful ignorance and greed. Buying the dip works until it doesn't, and it's the retail guy who's going to get burned. There is literally no reason to be buying up here with the uncertainty in supply chains, loss of revenue, and so on (besides the defensive's which is already a crowded trade). And it looks like these quick injections of liquidity happen across all indices, in unison. This leads me to believe they're algo driven and generally happening in low average volume. */rant*
With that being said we did have a continuation move today only to bounce off the hourly 50 period MA and the 15 min 200 period MA. They missed the gap originally this morning which is inherently bearish and had another leg downwards. We then counter trend rallied to about the .5 fib, flagged for a bit and got hit with a 15 min algo pump/stop hunt to take us back up to the opening range of the day across all indices and above the .5 fib. This is what i'm referring to above. We see it over and over again with a huge shot of buying over the course of a small period of time to either buoy the markets or to take out stops. Regardless.
This brings me to my next point. Somebody, or market, is lying to us. Long dated T-notes, gold, and silver all broke out convincingly from bullflag/consolidation zones today. This type of move into safe havens generally happens on large moves downward as a flight to safety. We obviously did not have that play out today. That's a huge divergence that begs being paid attention to. Now, we only have one daily confirmation for each of the stated markets but they were on higher than average volume besides 10 yr T-notes, and otherwise the charts look convincing.
I will say gold looks a little funky and does have an RSI divergence and still hasn't broken the top trendline, but the psychological level of $1600 was broken (and closed above) and that's important.
On SPX we have formed a proper channel to the downside (albeit shallow) but the technicals are little cleaner
IWM is the wildcard here. It had a break out upwards out of a triangle and a successful (as of today) retest of the trendline and then unconfirmed break of the downtrend line from the highs. This is going to be one to watch; BUT i think IWM and some of the components of the Russel 2k are getting some love due to not having as much international exposure, just a hunch.
I'm watching for a rounded top of all of the majors and a move down to create the neckline of a H&S and a subsequent larger move down after that plays out. But i understand that that is most likely fantasy.
Regardless, the fundamentals AT SOME POINT should start bleeding through. The futures market had a repricing overnight after Apple came out saying that it would miss on Q1 earnings. (Might i add /NQ was down almost an entire 1% at one point, and completely retraced to be possitive.) And this is most likely going to hurt all of the large companies that have exposure to China. But, the market essentially shrugged it off as fake news, or something. And that's what worries me. Also a side eye at Walmart today after wiffing on earnings this morning and trading higher. Not to mention China is the second largest economy in the world. I wish i could use memes on these because i have soo many to express how thoroughly confused i am by some of this.
The facts are we're still grossly overextended with horrible market structure and a gap-a-palooza down below. We're 20% from the weekly 200 period MA on the DOW, 22% for SPX, and 35% extended from the weekly 200 period MA on the NDX. The other facts are the market doesn't give a shit and we'll most likely run this into a blow off top scenario and the SPX will be back at 3000 in the course of a week or two. BUT, There is still so much liquidity dip buying this that even though every indicator both technical and fundamental is starting to point to lower prices we still have Trump's reelection (new ATH's every day baby), overly accommodative fed reserves across the world, and a horde of cash looking for yield. It's like shoving 20 pounds of shit into a 10 pound bag. And until that shit starts bursting at the seams we're in this perpetual stop hunt both ways. I'm honestly not sure what it will take to get this market to correct. The threat of a global pandemic sure isn't doing the trick. Hey, who knows. Maybe "they" know that if we do correct something horrible will happen and we'll just plunge straight to recession and the world will end (credit bubble, defaults, pension funds) and that's why stonks can only go up. To save the world. /S.
Speaking of stonks only go up. This could just be another smaller bull flag pattern for the run at $340, and then $350.
Sorry for the long winded break down. But all in all i'm still short. It's been like the thunderdome out there but i still have a short position on SPY via options, still long metals, and have been hedging with futures options and also micro contracts. VIX has been a whipsaw factory and untradable in my opinion. If we do turn overtly bullish a short on safe havens like metals and 10 yr t-notes would be juicy, but that would have to be after the uncertainty of the virus subsiding completely imo.
As always, this is not trading advice. This is my analysis of current markets based on my own personal TA.
So last week we did end up having a trendline break down out of the ascending triangle or wedge i had noted beforehand. (I had meant to do a post Thursday but was indisposed.) We then had a restest of the top trendline and subsequent (albeit unconvincing) failure, only to be whipsawed by the plunge protection team, or "they", in the last half hour of trading Friday.
*rant* And this is what i don't get - What the **** are they afraid of? It's like "they" had to eek out a daily/weekly gain so the financial media can print "New ATH's" again and again. Or it's just the algos in a perpetual stop hunt. And i'm not going to bend my brain on who "they" are as it literally could be the herd, or large institutions trying to keep this afloat, i honestly have no idea and frankly don't care. What i do care about is the divergences appearing in the market and the turn we're seeing into willful ignorance and greed. Buying the dip works until it doesn't, and it's the retail guy who's going to get burned. There is literally no reason to be buying up here with the uncertainty in supply chains, loss of revenue, and so on (besides the defensive's which is already a crowded trade). And it looks like these quick injections of liquidity happen across all indices, in unison. This leads me to believe they're algo driven and generally happening in low average volume. */rant*
With that being said we did have a continuation move today only to bounce off the hourly 50 period MA and the 15 min 200 period MA. They missed the gap originally this morning which is inherently bearish and had another leg downwards. We then counter trend rallied to about the .5 fib, flagged for a bit and got hit with a 15 min algo pump/stop hunt to take us back up to the opening range of the day across all indices and above the .5 fib. This is what i'm referring to above. We see it over and over again with a huge shot of buying over the course of a small period of time to either buoy the markets or to take out stops. Regardless.
This brings me to my next point. Somebody, or market, is lying to us. Long dated T-notes, gold, and silver all broke out convincingly from bullflag/consolidation zones today. This type of move into safe havens generally happens on large moves downward as a flight to safety. We obviously did not have that play out today. That's a huge divergence that begs being paid attention to. Now, we only have one daily confirmation for each of the stated markets but they were on higher than average volume besides 10 yr T-notes, and otherwise the charts look convincing.
On SPX we have formed a proper channel to the downside (albeit shallow) but the technicals are little cleaner
IWM is the wildcard here. It had a break out upwards out of a triangle and a successful (as of today) retest of the trendline and then unconfirmed break of the downtrend line from the highs. This is going to be one to watch; BUT i think IWM and some of the components of the Russel 2k are getting some love due to not having as much international exposure, just a hunch.
I'm watching for a rounded top of all of the majors and a move down to create the neckline of a H&S and a subsequent larger move down after that plays out. But i understand that that is most likely fantasy.
Regardless, the fundamentals AT SOME POINT should start bleeding through. The futures market had a repricing overnight after Apple came out saying that it would miss on Q1 earnings. (Might i add /NQ was down almost an entire 1% at one point, and completely retraced to be possitive.) And this is most likely going to hurt all of the large companies that have exposure to China. But, the market essentially shrugged it off as fake news, or something. And that's what worries me. Also a side eye at Walmart today after wiffing on earnings this morning and trading higher. Not to mention China is the second largest economy in the world. I wish i could use memes on these because i have soo many to express how thoroughly confused i am by some of this.
The facts are we're still grossly overextended with horrible market structure and a gap-a-palooza down below. We're 20% from the weekly 200 period MA on the DOW, 22% for SPX, and 35% extended from the weekly 200 period MA on the NDX. The other facts are the market doesn't give a shit and we'll most likely run this into a blow off top scenario and the SPX will be back at 3000 in the course of a week or two. BUT, There is still so much liquidity dip buying this that even though every indicator both technical and fundamental is starting to point to lower prices we still have Trump's reelection (new ATH's every day baby), overly accommodative fed reserves across the world, and a horde of cash looking for yield. It's like shoving 20 pounds of shit into a 10 pound bag. And until that shit starts bursting at the seams we're in this perpetual stop hunt both ways. I'm honestly not sure what it will take to get this market to correct. The threat of a global pandemic sure isn't doing the trick. Hey, who knows. Maybe "they" know that if we do correct something horrible will happen and we'll just plunge straight to recession and the world will end (credit bubble, defaults, pension funds) and that's why stonks can only go up. To save the world. /S.
Speaking of stonks only go up. This could just be another smaller bull flag pattern for the run at $340, and then $350.
Sorry for the long winded break down. But all in all i'm still short. It's been like the thunderdome out there but i still have a short position on SPY via options, still long metals, and have been hedging with futures options and also micro contracts. VIX has been a whipsaw factory and untradable in my opinion. If we do turn overtly bullish a short on safe havens like metals and 10 yr t-notes would be juicy, but that would have to be after the uncertainty of the virus subsiding completely imo.
As always, this is not trading advice. This is my analysis of current markets based on my own personal TA.
