Are You Not Entertained!?

Seemingly fraudulent 45 degree market pump last night on more garbage headlines about Trump and what his latest bowel movement looked like.
We're in a recovery not a depression, Trump's fighting for you, Stimulus hopes, Vaccine hopes, FED will do anything, please, trust us!, Nancy Pelosi is tough, but she loves you! Etc. etc. I do my best to tune out this "noise" as I see these headlines and the apparent resulting price action as a distraction from reality - which is that the real economy is toast.

Notes:

- Airlines rallying on Trumps tweets about a bailout. Yay Airlines! Good luck convincing people to fly.
- The 10Y yield jumped right back to yesterday's pre-close level at .777.
- The majors all opened up about 1%.
- Vix got smacked back down to the 29 level overnight.
- USD is relatively flat, Gold down 1%, Bitcoin down about half a percent, Oil down about 2%.

On to SPY Analysis:

We had a solid bounce off the 21 day EMA yesterday, after we fell back below the Green line resistance, and 50 Day MA. Bulls couldn't hold the Green line or the 50 day MA, after capturing those levels prior to Trumps stimulus negotiations tweets. Over night we were pumped back to the 338 level, and are currently sitting comfortably around 339 and change. Yesterday I mentioned the possibility of trading sideways, especially while we're stuck between tight support and resistance levels. We may see a continuation of selling today, and a breach back below the 50 day MA once again to keep the downtrend thesis intact. Whether or not we find interim support again at the 21 day EMA is anyone's guess, but imo the next major support is at the 100 day MA/recent low on Sep 24th, between 320 and 324. This is a key level to watch imo.

Stay tuned for live updates throughout the day, and as always, thanks for having me guys. Cheers, Michael.

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Comment:

Light price action so far, nothing to write home about. Looks like the S&P is continuing it's lazer like, 45 degree pump higher. Clearly this is not natural price action after a day like yesterday. Plunge protection team coming out on a 1% sell-off. What a farce. Vix is getting hammered. Now sitting mid 28's. I'm not buying it. In my opinion, buy the dippers coming out to generate liquidity for smart money before the next leg down. Stay tuned..

Comment:

Tightest Bollinger Bands I've seen on the 5 minute in a while. "Nothing to see here", is the clear message heading into the afternoon session. We've been in a $1 range all day. Let's see what smart money decides to do when power hour rolls around. I suspect it's going to be risk off. We'll see...

Comment:

FOMC minutes expected at 2PM, and investors will be looking for further confirmation of dovish future monetary policy, and hints of the FED's future asset purchasing blueprint. Nothing major expected to be released as far as I know, so this could be a non-issue on the day.

Comment:

Persistent up trend today toward the Green line resistance on low volume. Will the bulls get rejected again like yesterday? I think so. If so we'll be looking at the 50 day MA as first support, then the 21 day EMA as a last resort support. If we break below the 50 day MA for the second day in a row, the bearish hypothesis strengthens significantly. The next major support level would be around 320-324 between the previous low on Sep 24th, and the 100 day MA. I'm still eyeing 300 as a potential target for the completion of the head in the head and shoulders pattern we've discussed in previous posts. Stay tuned..

Comment:

Volume increasing here as we approach the Green line resistance. Sitting at 341.50.

Comment:

Okay guys, bullish day to say the least, but we remain below the Green line resistance. Much like Monday's price action, we opened above the 50 day MA, we rallied to just below the Green line resistance on low volume, but failed to break above. We continue to trade in this tight range. Weekly Jobless Claims are out tomorrow morning, so it should be interesting to see how the "recovery" is progressing on the job front, after last weeks miss. VP Debate is tonight as well, which should make for an interesting soup of shocking headlines tomorrow.

Have a great evening guys, and thanks for your time. Cheers, Michael.