The Bear Sips His Whiskey

After a day of trading, the bear sips his whiskey, then decides he's just way too stressed to get friskey.
He watches his charts over and over again, and then he shakes his head, before he brushes his teeth and get's ready for bed.
His paws are sweaty, and his thoughts are heavy, he knows he's probably gonna dream of that chevy, that he can't afford, because his account looks like a honda accord.
He wakes up frantic, and his bed is soaking wet, but not cause he peed, but because of the sweat.
He's anxious, he's nervous, he thinks this whole thing is coming down, but whether he's short right now or not, his fur will always be brown.
He's a bear, yes he is, and his heart is big, but if the FED shows up one more f*cking time, he may have to find a new gig.
But he ain't worried, not even for a second bro, cause the tides a'leaving, and stock are in for a reckoning yo.
The bulls will be running scared, and the bears roar will be echoing loud, and if not today, or tomorrow, my fellow bears, this once in a lifetime trade will be soon be ours.

Comment: Hey guys, a bit of humor to start the day. Not much to write home about this morning - we saw some weakness on the majors overnight, and into the open. But, most of the losses have now been erased as buy the dippers continue to pile into risk at all-time high's. We saw some weak labour market data this morning with the ADP employment change coming in at 307K vs expectations of 360k. Bond yields continue to spike, with the 10Y yield hoverig around .95. The dollar is about to see a 90 handle. Vix is back at 21 and off the lows, but we're looking at a lake right now, with no apparent interest in risk protection. It should be an interesting day as jobless claims are out tomorrow morning, and I suspect we may see a third weekly rise, which could put pressure on risk assets heading into Friday's important (November) payrolls print.

As always, I appreciate your time today guys. If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
Comment: Interesting view of SPY on the 3 month period. Take a look at the RSI; the multi-year divergence is obvious, but the channel is particularly defined. The RSI shows potential for a major medium to long-term correction, imminently. What does this megaphone pattern have in store for us heading into year end?
Comment: Seeing some weakness here as we test the 50 period MA on the 5 minute. The bulls appear to be on the verge of losing the ascending channel support. Power hour might have some fireworks in store for us. Let's see what happens next...
Comment: I'm keeping an eye on the gap fill (362), as first major support...
Comment: Vix is notably off the morning's low's but looks like a boxer in the 12th round. A 50% crash in volatility in the month of November. Yes, Powell, we got the message, Ctrl + P.
Comment: The Put-to-Call ratio still looks insane to me, hovering around .47...
Comment: I think we all know bonds are about to experience some turbulence. All you have to do is look at the 10Y yield. We're up over 80% since August, and this is only the beginning...
Comment: 50 period MA on the hourly is sitting just below the gap fill around 362. Let's see if the bears show up at power hour...
Comment: Just in time for power hour, we're seeing headlines that Pelosi and Schumer are backing the new $900 Billion stimulus bill, and are calling for the McConnell to return to the negotiating table. Yields are spiking along with stocks. Wash, Rinse, Repeat. Will the farce ever end?
Comment: Tomorrow morning, we'll be getting a strong view of the labour market with new jobless claims numbers, which many economists say could spike as we approach the winter season. But, all the while, with several other negative catalysts haunting valuations, stocks are defying logic, and are trading near all-time high's. I know for many traders and investors this is very frustrating. But, here's my best explination as to why this is happening: There is simply far too much money chasing far too few assets right now. Trillions in "liquidity" are flooding stocks because rates/yields are either too ZIRPish, or worse, NIRPish. There's nowhere else for the money to go. But, I would say, reality always catches up to fiction. When the momentum eventually shifts, we're going back to multiples of 15, and rates will tighten monetary conditions to the point of fracture.
Comment: That's all folks! Thanks for the great chats today, and I appreciate all the continued support. I hope everyone has a peaceful and relaxing night, and I look forward to seeing you guys tomorrow morning for the jobless claims print. It should be a doozy. Cheers, Michael.
If you enjoyed our analysis today, please hit the Like button and subscribe to our profile so you don't miss any new updates. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research.


I hope you're right. The SPY may hit 4500 before the big drop. Don't forget there's no common sense here. It's strictly a casino. People think they're counting cards and can't lose.
+2 Reply
@Maldonazo, Completely agree. I was just chatting with another trader last night and they were saying 4,000 by year end is possible. If Dec isn't an outside reversal candle on the monthly, with a clear rejection back below the megaphone resistance trendline, I'll go neutral and watch from the sidelines until we see some normalization (if ever). It's all monopoly money anyway, right? McDonald's $100 menu is around the corner. Lol.
Maldonazo Hedge_Of_The_World
@Hedge_Of_The_World, Follow this guy on Twitter. I don't know how accurate he's gonna be, but his views make sense. https://twitter.com/DaveHcontrarian/status/1334460638958129153
+1 Reply
Maldonazo Maldonazo
@Maldonazo, I bought $uvxy at $20 and I'm still holding it. I'm gonna hold it for a long time until it hits. I'm using it as insurance to trade on top of. You don't want to be trading naked right now.
+1 Reply
@Maldonazo, I appreciate that, I'm using UVXY and HUV to hedge at the moment, also, and they're doing their job. The last thing traders want is to be forced to liquidate their portfolio's before year end, and pay hefty capital gains next year. We're paying a lot for risk protection, though. Vix got hammered 50% in November, that was a bit of a surprise - the term structure told a different story.
@Maldonazo, Thanks for sharing, I'll check it out for sure.
My wife just asked me why I was laughing so hard. I told her I have never laughed when losing money, but this guy is smart and hilarious! Well done! We are on the cusp of a magnificent correction. I wish the the second round of stimulus would get approved so the market would correct. I believe EVERYTHING is priced into this market and then some. An approved smaller than anticipated stimulus along with an approved vaccine might just be what we need to get this market back to normal. Thanks again for the daily analysis. It's always spot on.
+2 Reply
Hedge_Of_The_World dustinmerryman
@dustinmerryman, Thanks buddy, I appreciate it! My wife approved this morning's poem. Lol. I completely agree. A proper sell the news event on a vaccine or stimulus is so overdue. It's like the further out your perspective, the clearer the painting becomes. Things look like they're about to get ugly.
dustinmerryman Hedge_Of_The_World
@Hedge_Of_The_World, Got anymore whiskey left!?
+1 Reply
Hedge_Of_The_World dustinmerryman
@dustinmerryman, Lol. Right?
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