Alright, i'm an idiot and AGAIN exited out of this as i was almost finished with it. All it takes is to hit "publish" in anything under 15m and if you hit "cancel" it completely deletes everything. Tight.
So here it goes again.
Alright, last night into today the futures traders did the thing we there gapped us up over resistance. I was originally going to title this 'Deja Vu' because that's what it felt like. Last Monday that's exactly what they did as well. Whenever we get to key spots of either support or resistance that are too stronk the cheeky futures traders will either gap us up over, or below these key levels to defeat the cash session bears or bulls. And that's exactly what happened.
Fast forward to this morning's cash open we were still seeing some of that residual churn with cyclicals, small caps, and banks being courteous enough to fill their gap while NDX/QQQ held up the broader market. Throughout the rest of the morning we look all systems go for a breakout with all indexes and leading indicators green and solid buy volume. But as soon as we did fill those gaps they flipped. IWM, cyclicals, transports, and DJI all started tearing higher while NDX started to sell of a little bit. Now, by about lunch time this was keeping SPY and SPX completely flat. Stuck in the middle.
But sometime around 1 P.M EST there was some selling that entered the market on SPY. It looked organic in the sense that there was no algo pop. And it slowly started to accelerate with NDX picking up the pace. With the imbalance of NDX and QQQ that's all it took to start bringing the broader market down with it. 10 pounds of shit in a 5 pound bag. And when you start getting these moves on stock or in this case entire indexes the exit door is only so big. All of this was with DJI actually leading the day for gains. SPY started to have this sell off shortly after NDX started to go for it's gap.
The rest of the day was a follow through or continuation of the selling which ended up bleeding into the broader market with NDX/QQQ leading.
Hell of a head fake though huh? We went from gapping over resistance again and going for a new high to coming back into the range from two weeks ago.
Round trip SPY had a 2.4% range
IWM 3.6%
DJI 2.2%
and NDX/QQQ 4.5% round trip
That's a hell of a whipsaw, or rodeo. Kind of like the thunderdome, but not as ominous or scary. That doesn't mean we can't see the thunderdome later this week. It's only Monday.
There was news that broke the last hour that CA is reclosing some of it's economy. And that surely could have accelerated the selling. But i'm not sure it was the catalyst. The original selling, on good volume, on SPY looked organic. Today looked like it could have been a confluence of events, both technical and fundamental.
First off NDX/QQQ looked like it was seeing profit taking or lightening their positions for big tech earnings next week. But remember what i said about the exit door only being so big? When everyone's on the same side of the boat and it starts to capsize the exit route is blocked by the amount of people trying to abandone ship. Secondly we could have been seeing some big money that was trapped at this level from last time we were up here from the island reversal start getting out of those trapped positions. Now you throw in the prospect of the U.S's largest economy shutting back down you got yourself a series of unfortunate events. Just when everyone was trying to cycle out of their imbalanced positions into cyclicals and small caps they get hit with more uncertainty.
Now i know the big question on everybody's mind right now is "is this it". Is this the bubble starting to deflate on NDX/QQQ?? And the question is probably not. For us to have another cataclysmic move back down to retest the March lows i feel like we need a few things to happen all at once. First being a shutting back down of the broader economy, which isn't fully priced in, bad earnings, and the virus to start ticking up elsewhere in the country, so the market can start pricing back in reclosing of the broader economy. Not necessarily in that order. If not money will be strategically and tactically moved around the market looking for safety (NDX, big tech) and they can do this infinitely until it's safe enough to get back into the broader market. BUT, the question is; are the big tech stocks overvalued in relation to their current valuation. And are small caps, cyclicals, industrials, etc undervalued in relation to their current valuations. We'll start to know tomorrow with bank earnings.
The story today is we went from breakout to reversal in the same exact day. Now, neither of these are/were confirmed just yet. But we broke above resistance only to sell back into the range that we printed two weeks ago. That's a pretty quick change in sentiment and the VIX was higher this morning even when we were breaking out. But it was last week as well. The question is if there's follow through. Or if the buy the dip crowd takes up back to where we started this morning, possibly even overnight.
If we do head lower we'd need to break the support/demand zone that kept us afloat last week. I have $312.85 on the daily chart. And also $300. $300 is the bulls Alamo. If we break $300 that's significant. On the upside we need to make a new high. The high we had from last month was $323.41. We need to break that in order to keep this breakout/bull case intact. If not we're stuck in this vortex of rangebound until the world looks like it's ending again, or we get a vaccine deployed or earnings are back to where they were last year. SPX technically did print a new high today but didn't even close at it on a 5m basis. It was a textbook straight out of central casting double top.
The 5m tells the tale. We gapped up literally .02 away from the support/resistance i had from last year and they fight for it for a little (while XLF, IWM, and DJT filled their gaps) and then everything started rallying. We got about $1 from making a new high and then went flat, this is when NDX/QQQ started selling off. From there they had a last try to get to the key level of $323.40 (last months high) but then the selling picked up. Volume was good, and it was down hill from there. They tried and failed to protect the open level/$320.11 and after that knifed through the top of last weeks range. The top of the week before that's range, and ended below the top of that. Pretty textbook reversal
Hourly showing the failure to make a new high and the three hourly candles showing the rejection ending us back in the triangle we had just broken out of. Failed breakout
Even more prevalent on the 4h. That's a hell of a pivot candle
Daily showing the rejection from my daily resistance at $320.35 and a trade all the way back into the range from the past month. Note volume as well. Last time we had this much volume was when we last visited $300
SPX with a perfect tag of last months high and a rejection
Textbook double top
And traded back into the triangle. Support at $3144 which was support from last week
ES trading in a straight line down. That looks almost like panic selling. And it ended at the top trendline from the yearly megaphone pattern
IWM showing full circle from gapping up, filling the gap, trading up back into it's triangle, out of it on a breakout, and then back into, and back out of it
Note higher volume as well
17% move on the VIX today. Trading right through the .618 fib and hitting the .5
DJI was actually leading the majority of the day and had retaken it's triangle trendline it had such an issue with the past week, only to give it back up. They closed almost completely flat
Earlier today it had looked like they had gapped DJI up over the 200 period MA, but this is ANOTHER rejection from this MA
NDX looking nasty
That's a hell of a pivot
Ok the daily looks absolutely horrible and printed a daily pivot candle. That still needs to be confirmed by the market structure/profile below is not healthy. We'll see if the buy the dip crowd can save it this time
XLF not nearly as bad, actually got in two gap fills today and ending positive by .43%
Look at the daily -also looked like a take profit day?
Silver was up almost 4% today at one point and wicked it's high from pre-COVID
Gold looking noticeably weaker that. That's a pretty bearish close
Bonds not flashing alarm bells just yet. But we'll see what tomorrow brings
This last chart is the put call composite over the course of the past decade. That horizontal trendline is the low we printed last month. The market hasn't been this bullish since 11/05/2012. We printed the second most bullish print today
I honestly feel like big money got caught slippin today right when they were most vulnerable. While trying to not rock the boat too much when getting off of it while they were all on the same side of it. The question is if there will be follow through. This time around we have earnings to toss into the mix. Which should be interesting to say the least. This volatility is nowhere near done and it looks like people got some jitters over the CA news as well. If that type of news keeps up even the permabulls will have to step aside as the economy is going to take another lick.
I was literally $1 from getting stopped out today on most of my positions, but the VIX being elevated this morning stopped me from getting hit at the open with the gap. So, with the Vega today i'm still -19 delta...
I mean, i know i say it every time. But just like that, in the span of one trading day we went from breaking out, all is well and fine in the world, the having a relatively serious looking reversal mid day. And it's only Monday. So, as always, keep your head on a swivel.
These things take me like an hour or so to do and i was more than half done with this one when it fucking cancelled it out. So if you like go back to Friday's idea, which is linked below where you can get my play by play to get a feel for what i was explaining.
Short story: bears need follow through, conviction. Need to break $312 and send us crashing back into $300. Bulls need to hold $312 and buy the dip and send us back to where we started today to try and make a new high if they want their thesis still intact.
That's for reading everyone and i hope you had a good day trading.
This is not trading advice. This is my own personal opinion based on my own personal TA. You are responsible for your own trades
Note: also like a true idiot i posted it as a private chart. Batting 1000 today.
So here it goes again.
Alright, last night into today the futures traders did the thing we there gapped us up over resistance. I was originally going to title this 'Deja Vu' because that's what it felt like. Last Monday that's exactly what they did as well. Whenever we get to key spots of either support or resistance that are too stronk the cheeky futures traders will either gap us up over, or below these key levels to defeat the cash session bears or bulls. And that's exactly what happened.
Fast forward to this morning's cash open we were still seeing some of that residual churn with cyclicals, small caps, and banks being courteous enough to fill their gap while NDX/QQQ held up the broader market. Throughout the rest of the morning we look all systems go for a breakout with all indexes and leading indicators green and solid buy volume. But as soon as we did fill those gaps they flipped. IWM, cyclicals, transports, and DJI all started tearing higher while NDX started to sell of a little bit. Now, by about lunch time this was keeping SPY and SPX completely flat. Stuck in the middle.
But sometime around 1 P.M EST there was some selling that entered the market on SPY. It looked organic in the sense that there was no algo pop. And it slowly started to accelerate with NDX picking up the pace. With the imbalance of NDX and QQQ that's all it took to start bringing the broader market down with it. 10 pounds of shit in a 5 pound bag. And when you start getting these moves on stock or in this case entire indexes the exit door is only so big. All of this was with DJI actually leading the day for gains. SPY started to have this sell off shortly after NDX started to go for it's gap.
The rest of the day was a follow through or continuation of the selling which ended up bleeding into the broader market with NDX/QQQ leading.
Hell of a head fake though huh? We went from gapping over resistance again and going for a new high to coming back into the range from two weeks ago.
Round trip SPY had a 2.4% range
IWM 3.6%
DJI 2.2%
and NDX/QQQ 4.5% round trip
That's a hell of a whipsaw, or rodeo. Kind of like the thunderdome, but not as ominous or scary. That doesn't mean we can't see the thunderdome later this week. It's only Monday.
There was news that broke the last hour that CA is reclosing some of it's economy. And that surely could have accelerated the selling. But i'm not sure it was the catalyst. The original selling, on good volume, on SPY looked organic. Today looked like it could have been a confluence of events, both technical and fundamental.
First off NDX/QQQ looked like it was seeing profit taking or lightening their positions for big tech earnings next week. But remember what i said about the exit door only being so big? When everyone's on the same side of the boat and it starts to capsize the exit route is blocked by the amount of people trying to abandone ship. Secondly we could have been seeing some big money that was trapped at this level from last time we were up here from the island reversal start getting out of those trapped positions. Now you throw in the prospect of the U.S's largest economy shutting back down you got yourself a series of unfortunate events. Just when everyone was trying to cycle out of their imbalanced positions into cyclicals and small caps they get hit with more uncertainty.
Now i know the big question on everybody's mind right now is "is this it". Is this the bubble starting to deflate on NDX/QQQ?? And the question is probably not. For us to have another cataclysmic move back down to retest the March lows i feel like we need a few things to happen all at once. First being a shutting back down of the broader economy, which isn't fully priced in, bad earnings, and the virus to start ticking up elsewhere in the country, so the market can start pricing back in reclosing of the broader economy. Not necessarily in that order. If not money will be strategically and tactically moved around the market looking for safety (NDX, big tech) and they can do this infinitely until it's safe enough to get back into the broader market. BUT, the question is; are the big tech stocks overvalued in relation to their current valuation. And are small caps, cyclicals, industrials, etc undervalued in relation to their current valuations. We'll start to know tomorrow with bank earnings.
The story today is we went from breakout to reversal in the same exact day. Now, neither of these are/were confirmed just yet. But we broke above resistance only to sell back into the range that we printed two weeks ago. That's a pretty quick change in sentiment and the VIX was higher this morning even when we were breaking out. But it was last week as well. The question is if there's follow through. Or if the buy the dip crowd takes up back to where we started this morning, possibly even overnight.
If we do head lower we'd need to break the support/demand zone that kept us afloat last week. I have $312.85 on the daily chart. And also $300. $300 is the bulls Alamo. If we break $300 that's significant. On the upside we need to make a new high. The high we had from last month was $323.41. We need to break that in order to keep this breakout/bull case intact. If not we're stuck in this vortex of rangebound until the world looks like it's ending again, or we get a vaccine deployed or earnings are back to where they were last year. SPX technically did print a new high today but didn't even close at it on a 5m basis. It was a textbook straight out of central casting double top.
The 5m tells the tale. We gapped up literally .02 away from the support/resistance i had from last year and they fight for it for a little (while XLF, IWM, and DJT filled their gaps) and then everything started rallying. We got about $1 from making a new high and then went flat, this is when NDX/QQQ started selling off. From there they had a last try to get to the key level of $323.40 (last months high) but then the selling picked up. Volume was good, and it was down hill from there. They tried and failed to protect the open level/$320.11 and after that knifed through the top of last weeks range. The top of the week before that's range, and ended below the top of that. Pretty textbook reversal
Hourly showing the failure to make a new high and the three hourly candles showing the rejection ending us back in the triangle we had just broken out of. Failed breakout
Even more prevalent on the 4h. That's a hell of a pivot candle
Daily showing the rejection from my daily resistance at $320.35 and a trade all the way back into the range from the past month. Note volume as well. Last time we had this much volume was when we last visited $300
SPX with a perfect tag of last months high and a rejection
Textbook double top
And traded back into the triangle. Support at $3144 which was support from last week
ES trading in a straight line down. That looks almost like panic selling. And it ended at the top trendline from the yearly megaphone pattern
IWM showing full circle from gapping up, filling the gap, trading up back into it's triangle, out of it on a breakout, and then back into, and back out of it
Note higher volume as well
17% move on the VIX today. Trading right through the .618 fib and hitting the .5
DJI was actually leading the majority of the day and had retaken it's triangle trendline it had such an issue with the past week, only to give it back up. They closed almost completely flat
Earlier today it had looked like they had gapped DJI up over the 200 period MA, but this is ANOTHER rejection from this MA
NDX looking nasty
That's a hell of a pivot
Ok the daily looks absolutely horrible and printed a daily pivot candle. That still needs to be confirmed by the market structure/profile below is not healthy. We'll see if the buy the dip crowd can save it this time
XLF not nearly as bad, actually got in two gap fills today and ending positive by .43%
Look at the daily -also looked like a take profit day?
Silver was up almost 4% today at one point and wicked it's high from pre-COVID
Gold looking noticeably weaker that. That's a pretty bearish close
Bonds not flashing alarm bells just yet. But we'll see what tomorrow brings
This last chart is the put call composite over the course of the past decade. That horizontal trendline is the low we printed last month. The market hasn't been this bullish since 11/05/2012. We printed the second most bullish print today
I honestly feel like big money got caught slippin today right when they were most vulnerable. While trying to not rock the boat too much when getting off of it while they were all on the same side of it. The question is if there will be follow through. This time around we have earnings to toss into the mix. Which should be interesting to say the least. This volatility is nowhere near done and it looks like people got some jitters over the CA news as well. If that type of news keeps up even the permabulls will have to step aside as the economy is going to take another lick.
I was literally $1 from getting stopped out today on most of my positions, but the VIX being elevated this morning stopped me from getting hit at the open with the gap. So, with the Vega today i'm still -19 delta...
I mean, i know i say it every time. But just like that, in the span of one trading day we went from breaking out, all is well and fine in the world, the having a relatively serious looking reversal mid day. And it's only Monday. So, as always, keep your head on a swivel.
These things take me like an hour or so to do and i was more than half done with this one when it fucking cancelled it out. So if you like go back to Friday's idea, which is linked below where you can get my play by play to get a feel for what i was explaining.
Short story: bears need follow through, conviction. Need to break $312 and send us crashing back into $300. Bulls need to hold $312 and buy the dip and send us back to where we started today to try and make a new high if they want their thesis still intact.
That's for reading everyone and i hope you had a good day trading.
This is not trading advice. This is my own personal opinion based on my own personal TA. You are responsible for your own trades
Note: also like a true idiot i posted it as a private chart. Batting 1000 today.
Comment:
Bank earnings were mixed in my view but the market seems to think they went over pretty well. We all know what this looks like but the bulls are going to try and claw back some losses today after taking that L yesterday. We'll see how much steam they can gain.
Comment:
Alright NQ is down almost a full 1% while ES is only down about .3%. YM and RTY are still fighting for positive. Should be an interesting day..
Comment:
Everything's going for the same day gap..
Comment:
XLF and NDX gap filled.
Comment:
The trendline we opened on is the top megaphone trend line we had a bunch of validations on last week. It'll be interesting to see if they give it up.
Comment:
Spy same day gap filled.
Comment:
To me. This looks like an oversold bounce. .5 fib isn't till $317.77.
Comment:
We're in that supply zone we printed last week.
Comment:
5m close below that trendline. Back at $312.10..
Comment:
SPX still hasn't broke it's megaphone trend line though..
Comment:
XLF leading to the upside. QQQ/NDX leading to the downside..
Comment:
Um.. guys. The 10 yr.
Comment:
We're still printing pretty heavy bullish divergences on the 5m. BUT, these still haven't bled into even the 15m. Also, the hourly tagged it's 200 period MA. Last week this is what served as the downside target for the the bears. Keep that in mind.
Comment:
NDX/QQQ taking no prisoners. Going for it's next gap fill.
Comment:
SPX with it's second consecutive 5m close below it's megaphone trendline
Comment:
Hourly close above that trendline... It's funny how this has become a battlegroud.
Comment:
I wouldn't be surprised to see this. But we all know how often those play out..
Comment:
Dip buyers out there doing what they're trained to do. The question is if they can turn this into a(nother) reversal. Strength is still in DJI.
Comment:
So far we've made a higher low on SPY. The bears need to break $310.50, which is also a gap fill, if they want to have any sort of continuation.
Comment:
Volume tapering off on the 5m. We're consolidation below the .382 fib. This will be anyone's game going into close.
Comment:
Transports getting some love today.
Comment:
May be speaking too soon but this is starting to look like a deadcat led by XLF.
Comment:
If they wanted to burn anyone who just took a short position 15 mins ago this would be where they do it.
Comment:
I'd reckon here comes the candle that screws everyone that just went long here shortly.
Comment:
There it is. We'll see if the bulls can fend them off.
Comment:
Bulls actually putting their back into it. We'll see if they can pull it out. Check volume.
Comment:
Alright, .5 fib here and also the top of the range we printed last week..
Comment:
SPX trying to make it's way out of the triangle again.
Comment:
That last hourly candle actually had above average volume. Doesn't seem like the bulls are done yet.
Comment:
Getting to the bearflag trendline..
Comment:
Decent save so far.
Comment:
Bears nowhere to be found. Apparently economies doing splendid. Dow Jones 20 is the new place to be.
Comment:
But low and behold. Bearish divergences printing on DJI.
