If you've been keeping up with my charting, you know that I am still majorly bearish going into March FOMC, OPEX, and even beyond.
There are plenty of reasons.
MACRO: HOT inflation print --> FED is forced into a corner where they have to raise rates
LIQUIDITY: End of QE from the FED (no money printer)
STRUCTURAL FLOWS: Supportive flows end on 03/16 (VixEx)-03/18 (OPEX) and there is essentially a week and a half afterwards where bears will have their chance to pounce prior to supportive EOM/BOM flows coming on again.
PRICE/TA: 20sma has NOT been regained in this period where supportive flows WERE PRESENT. Bulls have had their chance, and have failed at every chance they had to get above the 20sma close and sustain it.
RETAIL POSITIONING/SENTIMENT:
There were 5 weeks straight of inflows from retail. Major bottoms do NOT have INFLOWS. It's quite the opposite. You would have major outflows to signal a bottom. Go to @Norseman1 on Twitter to see his lipper fund flows equity chart.
Continued pouring in of inflows entails that retail has not yet capitulated. Without capitulation, no bottom.
Retail traders are still trading under the mentality of "BTFD" and it shows in the amount of inflow over the past few months.
And what's happening? They're getting absolutely F*'d. Market is down tremendously, but there's still zero fear.
They will continue to buy the dip until they will be forced to capitulate. Once down hard enough, they will liquidate their positions and get out (hence outflows) --> then and only then can we have a major bottom.
That is my honest view and why I have been posting primarily bearish charts.
Please listen :(
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PLAN
Whether it's the blue line or the green line overhead as resistance: I don't really care. The bottom line is that SPY has room for more upside in the next few days (remember the original calendar had until 03/14 for bulls to regain). Spy can potentially move up to 432 (blue line resistance) or 440 (green line resistance). IF it even gets there, that is where you open up positions. You can open tomorrow if you wish, but you'll likely have to hold through some major volatility to the upside unless you hedge with shorter dated call options.
Position:
03/25/22 SPY 400p
Targets: 404, 398, 394.5, 383
I'm not saying we get there, so do NOT go all in on your port please for the love of all that is good.
You do NOT need to play big to win big with puts.
You should be primarily cash as I have warned in the previous months.
Play it lightly to the downside. When you start to see actual fear in the markets (news headlines talking about worst crash in history, people calling for SPY below 380, permabulls switching to all in their port on puts, etc.,) - that is when you flip long.
From 03/16-03/18 onwards to EOM/EOQ ~ 03/30, bears have the opportunity to pounce. Structural flows will not be as supportive.
BUT Everything is dependent on the FED. Watch closely for what they do on 03/16. That will determine the course.
If hawkish, my position will win big.
Best of luck traders. Stay nimble :)
There are plenty of reasons.
MACRO: HOT inflation print --> FED is forced into a corner where they have to raise rates
LIQUIDITY: End of QE from the FED (no money printer)
STRUCTURAL FLOWS: Supportive flows end on 03/16 (VixEx)-03/18 (OPEX) and there is essentially a week and a half afterwards where bears will have their chance to pounce prior to supportive EOM/BOM flows coming on again.
PRICE/TA: 20sma has NOT been regained in this period where supportive flows WERE PRESENT. Bulls have had their chance, and have failed at every chance they had to get above the 20sma close and sustain it.
RETAIL POSITIONING/SENTIMENT:
There were 5 weeks straight of inflows from retail. Major bottoms do NOT have INFLOWS. It's quite the opposite. You would have major outflows to signal a bottom. Go to @Norseman1 on Twitter to see his lipper fund flows equity chart.
Continued pouring in of inflows entails that retail has not yet capitulated. Without capitulation, no bottom.
Retail traders are still trading under the mentality of "BTFD" and it shows in the amount of inflow over the past few months.
And what's happening? They're getting absolutely F*'d. Market is down tremendously, but there's still zero fear.
They will continue to buy the dip until they will be forced to capitulate. Once down hard enough, they will liquidate their positions and get out (hence outflows) --> then and only then can we have a major bottom.
That is my honest view and why I have been posting primarily bearish charts.
Please listen :(
------------------------------
PLAN
Whether it's the blue line or the green line overhead as resistance: I don't really care. The bottom line is that SPY has room for more upside in the next few days (remember the original calendar had until 03/14 for bulls to regain). Spy can potentially move up to 432 (blue line resistance) or 440 (green line resistance). IF it even gets there, that is where you open up positions. You can open tomorrow if you wish, but you'll likely have to hold through some major volatility to the upside unless you hedge with shorter dated call options.
Position:
03/25/22 SPY 400p
Targets: 404, 398, 394.5, 383
I'm not saying we get there, so do NOT go all in on your port please for the love of all that is good.
You do NOT need to play big to win big with puts.
You should be primarily cash as I have warned in the previous months.
Play it lightly to the downside. When you start to see actual fear in the markets (news headlines talking about worst crash in history, people calling for SPY below 380, permabulls switching to all in their port on puts, etc.,) - that is when you flip long.
From 03/16-03/18 onwards to EOM/EOQ ~ 03/30, bears have the opportunity to pounce. Structural flows will not be as supportive.
BUT Everything is dependent on the FED. Watch closely for what they do on 03/16. That will determine the course.
If hawkish, my position will win big.
Best of luck traders. Stay nimble :)