Too far too fast.
I wasn't expecting nearly the amount of aggression we saw from the sellers Sunday night into Monday, but i am also taking that as more to come. And i am calling the past few days a technical reversal.
Personally with the retest of at least one of my trend lines yesterday i thought we were going to get a continuance into the $320 area considering i saw yesterday as a consolidation/bear flag for another move lower. Well, in this market up is down, down is up, right is left, and QE is not QE. Regardless, i honestly wasn't surprised we got the bounce we did today just because of how fast the rug got pulled out. Which is hilarious to me because this still holds true to the downside, just not the upside. And it's really the only market that has bear flags turn into reversal patterns back upwards. But alas, what i see today was a liquidity (stop) hunt that did its' intended purpose. People get stuck underwater and either sell the losing position or stops get hit leaving big money/institutions cheap assets. Also, with trendline/pattern breaks it is not abnormal to see a break, retest, and then continuation BUT, WITH APPLE'S MASSIVE EARNINGS BEAT we actually might see a continuation to the upside. That's absent any new horrible developments with #plague2020. The only timeframe we filled the gap on was the 5min-hourly. Which means there could be more upwards potential technically. As i said gaps can be and are magnets for price.
Pay attention to IWM. I use it as a quasi leading indicator and honestly it's not a bad snake oil indicator. It led to the downside Thu-Fri, and showed relative strength yesterday, and not as much today. IWM DID fill the gap today on the daily.
My target of $320 is standing as i truly believe we just came too far too fast and the financial media narrative of "investors speculating the corona virus will not have global economic impact" is premature. I feel like there is plenty of bad news coming down the pipe, and i'm not too optimistic for the bulk of companies this earnings season as well. On SPY we did perfectly kiss the bottom of the channel i had formed on the hourly, but SPX did not hit the bottom of the channel yet. We also had an almost perfect rejection from the .5 fib. This could just be the quintessential bull trap. That and after eating away some of the liquidity at the top of the support zone (324.50) the next drill down (if it happens) will be a little deeper. Also note volume was a little lighter today, but still above average.
But again, this market has been defying TA here since we've had this mad rush of liquidity starting back in August.
So in ending; stonks go up, stonks go down. This is honestly no man's land. I opened up a strangle, closed my VIX calls and also just have some long puts that i'm feeling pain on. Still holding onto my metals longs as well but those got whacked today as well, which is another ode to the bulls. ALSO note the DXY is about to challenge its' last daily breakdown candle.
Also wanted to note we still have a MASSIVE RSI divergence on the monthly. But apparently those no longer matter in Jpow land.
I wasn't expecting nearly the amount of aggression we saw from the sellers Sunday night into Monday, but i am also taking that as more to come. And i am calling the past few days a technical reversal.
Personally with the retest of at least one of my trend lines yesterday i thought we were going to get a continuance into the $320 area considering i saw yesterday as a consolidation/bear flag for another move lower. Well, in this market up is down, down is up, right is left, and QE is not QE. Regardless, i honestly wasn't surprised we got the bounce we did today just because of how fast the rug got pulled out. Which is hilarious to me because this still holds true to the downside, just not the upside. And it's really the only market that has bear flags turn into reversal patterns back upwards. But alas, what i see today was a liquidity (stop) hunt that did its' intended purpose. People get stuck underwater and either sell the losing position or stops get hit leaving big money/institutions cheap assets. Also, with trendline/pattern breaks it is not abnormal to see a break, retest, and then continuation BUT, WITH APPLE'S MASSIVE EARNINGS BEAT we actually might see a continuation to the upside. That's absent any new horrible developments with #plague2020. The only timeframe we filled the gap on was the 5min-hourly. Which means there could be more upwards potential technically. As i said gaps can be and are magnets for price.
Pay attention to IWM. I use it as a quasi leading indicator and honestly it's not a bad snake oil indicator. It led to the downside Thu-Fri, and showed relative strength yesterday, and not as much today. IWM DID fill the gap today on the daily.
My target of $320 is standing as i truly believe we just came too far too fast and the financial media narrative of "investors speculating the corona virus will not have global economic impact" is premature. I feel like there is plenty of bad news coming down the pipe, and i'm not too optimistic for the bulk of companies this earnings season as well. On SPY we did perfectly kiss the bottom of the channel i had formed on the hourly, but SPX did not hit the bottom of the channel yet. We also had an almost perfect rejection from the .5 fib. This could just be the quintessential bull trap. That and after eating away some of the liquidity at the top of the support zone (324.50) the next drill down (if it happens) will be a little deeper. Also note volume was a little lighter today, but still above average.
But again, this market has been defying TA here since we've had this mad rush of liquidity starting back in August.
So in ending; stonks go up, stonks go down. This is honestly no man's land. I opened up a strangle, closed my VIX calls and also just have some long puts that i'm feeling pain on. Still holding onto my metals longs as well but those got whacked today as well, which is another ode to the bulls. ALSO note the DXY is about to challenge its' last daily breakdown candle.
Also wanted to note we still have a MASSIVE RSI divergence on the monthly. But apparently those no longer matter in Jpow land.
