Don't get caught holding the bag.
Something is wrong in the market. I'm not sure what it is, and i can't put my finger on it but the day to day behavior is the past week or so has been strange to me. We've had little to no institutional participation outside of algos who have been aggressively buying every dip anytime there has been one intraday. But it's almost as if these algos are running out of steam at technical levels. But also filling the gap with volume when theres a lack of sellers to pump price intermittently. This is giving the perception to the retail trader that they should keep buying, keep chasing. Take today for instance. We were rejected from $313 again today after sellers failed to show up to follow through on the gap down. The way back down to $310 was actually tradeable but as soon as we touched $310 the first time we immediately traded away from it on meh volume. That got faded and the only meaningful volume we had was on the way back down to $310. Broke it, and then we had a pump back to over $311. "Buy the dip" can't go wrong right? Wrong.
Watch for the rug pull.
Today was strange. It was almost spooky to me for some reason. /ZN was down another notable amount, VIX was down about 5% but we were slightly lower to flat. This is strange. It's a divergence or disconnect/dislocation to me. The only thing it could be is the VIX and the 10 yr frontrunning (????????) an upward move. I have no other way to explain it unless there's something happening underneath the hood i don't have visibility into. There was no clear coherence to price action today in the indices either. Every index was essentially up and or down the same amount (algos). The best way i can explain it is walking into a room that's supposed to be full of people but it's completely empty, with no activity. It was spooky. That end of day pump looks like it was just a smoke screen on the charts in price action before the rug finally gets pulled. Have retail fill your shorts and then drop the hammer. This morning we have a sell bias but that evaporated once we got to the cash open. Also weird.
We're at another key level and the usual market indicators are telling everyone to go right, but without the supporting nuances. Like, especially right now, the 10 yr was down without a corresponding move in equities. That's odd. It looks like bait.
I know we had new ECB stimulus (hooray for forever QE) and i'm not sure how that's affecting the plumbing of the financial market so i'm not sure if this weird market feeling is based off of that. One theory is that we're seeing liquidity finally start to dry up, and retail is now running out of gasoline for the tank.
A possible theory: www.reddit.com/r/wal...ketpocalypse_breach/
The dollar has also been falling for like 8 straight days and we're most likely due for a counter trend rally. Which i'm pretty sure would be bearish for stocks.
DXY. Notice this is the 6th daily close outside of the BBand. So unless something relatively drastic is happening in the global financial market that i don't know about we should see a bounce.
5m SPY chart with breakdowns
Daily doji candle. Not volume and price
SPX weekly
ES showing average volume. But keep in mind we were down 20 handles in pre market
IWM with a stall under resistance for the second day
VIX tagged it's 200 period daily MA almost perfectly before it retraced. But that retrace didn't come until the last few hours of the cash session. We did break RSI trend though
At around 6 A.M EST we saw almost a -5% move downwards in the VIX while ES was at the lows of the day
NDX actually leading to the downside. Daily will need one more down day for it to be a confimed reversal
DJI still closed below it's 200 period MA
But silver confirming a risk on rally
Gold respecting it's trend line. Decent retrace today.
Bonds with the biggest move since April, also confirming a risk on rally, but stocks were down to flat?
I said a couple days ago that i got spooked out of my longs and today i got the same feeling. There's something happening underground that i can't see or am not experienced enough to see but institutions are sitting out for some reason.
Tomorrow we have the jobs report, again. The last what, 5-6 weeks, the market has rallied on these numbers for no real reason. This may be a news catalyst for MM's and institutions use to move the market. Which way i have no idea, but the market hates being predictable. Keep that in mind.
Keep your head on a swivel and happy trading. Let me know if you have any ideas as to what we're seeing.
This is not trading advice. This is my own personal opinion based on own personal TA.
Something is wrong in the market. I'm not sure what it is, and i can't put my finger on it but the day to day behavior is the past week or so has been strange to me. We've had little to no institutional participation outside of algos who have been aggressively buying every dip anytime there has been one intraday. But it's almost as if these algos are running out of steam at technical levels. But also filling the gap with volume when theres a lack of sellers to pump price intermittently. This is giving the perception to the retail trader that they should keep buying, keep chasing. Take today for instance. We were rejected from $313 again today after sellers failed to show up to follow through on the gap down. The way back down to $310 was actually tradeable but as soon as we touched $310 the first time we immediately traded away from it on meh volume. That got faded and the only meaningful volume we had was on the way back down to $310. Broke it, and then we had a pump back to over $311. "Buy the dip" can't go wrong right? Wrong.
Watch for the rug pull.
Today was strange. It was almost spooky to me for some reason. /ZN was down another notable amount, VIX was down about 5% but we were slightly lower to flat. This is strange. It's a divergence or disconnect/dislocation to me. The only thing it could be is the VIX and the 10 yr frontrunning (????????) an upward move. I have no other way to explain it unless there's something happening underneath the hood i don't have visibility into. There was no clear coherence to price action today in the indices either. Every index was essentially up and or down the same amount (algos). The best way i can explain it is walking into a room that's supposed to be full of people but it's completely empty, with no activity. It was spooky. That end of day pump looks like it was just a smoke screen on the charts in price action before the rug finally gets pulled. Have retail fill your shorts and then drop the hammer. This morning we have a sell bias but that evaporated once we got to the cash open. Also weird.
We're at another key level and the usual market indicators are telling everyone to go right, but without the supporting nuances. Like, especially right now, the 10 yr was down without a corresponding move in equities. That's odd. It looks like bait.
I know we had new ECB stimulus (hooray for forever QE) and i'm not sure how that's affecting the plumbing of the financial market so i'm not sure if this weird market feeling is based off of that. One theory is that we're seeing liquidity finally start to dry up, and retail is now running out of gasoline for the tank.
A possible theory: www.reddit.com/r/wal...ketpocalypse_breach/
The dollar has also been falling for like 8 straight days and we're most likely due for a counter trend rally. Which i'm pretty sure would be bearish for stocks.
DXY. Notice this is the 6th daily close outside of the BBand. So unless something relatively drastic is happening in the global financial market that i don't know about we should see a bounce.
5m SPY chart with breakdowns
Daily doji candle. Not volume and price
SPX weekly
ES showing average volume. But keep in mind we were down 20 handles in pre market
IWM with a stall under resistance for the second day
VIX tagged it's 200 period daily MA almost perfectly before it retraced. But that retrace didn't come until the last few hours of the cash session. We did break RSI trend though
At around 6 A.M EST we saw almost a -5% move downwards in the VIX while ES was at the lows of the day
NDX actually leading to the downside. Daily will need one more down day for it to be a confimed reversal
DJI still closed below it's 200 period MA
But silver confirming a risk on rally
Gold respecting it's trend line. Decent retrace today.
Bonds with the biggest move since April, also confirming a risk on rally, but stocks were down to flat?
I said a couple days ago that i got spooked out of my longs and today i got the same feeling. There's something happening underground that i can't see or am not experienced enough to see but institutions are sitting out for some reason.
Tomorrow we have the jobs report, again. The last what, 5-6 weeks, the market has rallied on these numbers for no real reason. This may be a news catalyst for MM's and institutions use to move the market. Which way i have no idea, but the market hates being predictable. Keep that in mind.
Keep your head on a swivel and happy trading. Let me know if you have any ideas as to what we're seeing.
This is not trading advice. This is my own personal opinion based on own personal TA.
