What a night last night huh? The dow went like 600/700 points round trip in less than 24 hours.
But honestly this volatility points to it being a little toppy and the charts seem to be pointing that way too. BUT, with the amount of liquidity plowing into the markets i'm not betting on big money, or any money for that matter giving anyone their dream entry. It's like the thunderdome out there the past few days.
On Spy we almost perfectly kissed the uptrend/RSI divergence line creating/confirming an ascending wedge, and the move in the last 10 mins or so lets me know that that could play out at any moment. SPX and ES both show a broadening wedge which is no bueno as well. We still have RSI divergences on all three and ES double topped today. It's literally the wild west from here on out in my book. I'm going long but also looking to buy the VIX around $12.50 (almost had it today) and going to keep building metals positions as they did break out of their months long consolidation. Puts right now are just burning money unless you're day trading the .50 moves. Meaningful earnings start next week and like i said i think those will be the harbinger of more volatility especially in specific sectors. Until then it's back to our regular scheduled program of the twilight zone where recessions, corrections, pullbacks, and now even dips are illegal.
Remember, buying the dip works until it doesn't. I recommend spreads instead of just buying calls or puts and/or shares. Keep your head on a swivel and stay agile with some cash on the side to deploy.
This is not trading advice, these are opinions based on my own personal TA
