1. I hate the way you always seem to rise, even when you're supposed to fall. 2. I hate the way you make me scratch my head, when price action makes no sense at all. 3. I hate the way you brand me a contrarian, even though we all know the real economy is dead. 4. I hate the fact that you only seem to move, off of sentiment from the FED. 5. I hate that you give me road rage, when pushing my shopping cart at the grocery store. 6. I hate that you no longer care about fundamentals, and now you've made technicals a bore. 7. I hate the way that price action now controls sentiment, and not the other way around. 8. I hate when you squeeze me out of my short, even when support clearly hasn't been found. 9. I hate your stubborn attitude, when all the facts that are stacked against you stand tall. 10. But, most of all, Mr. Market, I hate the way I don't hate you, not even a little, not even at all.
Yours Truly,
The Bears
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Hey guys, all jokes aside, I'm still short Nasdaq, still long Vix, and my bearish thesis stands intact. We saw a massive rejection on Monday at long-term resistance (top of the megaphone pattern), and yesterday we just about filled the gap. This morning we're seeing some strength, which is to be expected after the gap fill, and now we're retesting resistance once again. As I've said before, the bulls want to close us above the megaphone on the monthly, so just as we've seen for 4 months straight, they're going to keep hammering this resistance until it breaks.
Personally, I'm observing this resistance line as cyclical and it goes back to 2011. I don't see it breaking, and if the bulls epic November rally loses traction before month end, the downside is absolutely gargantuan.
Stay tuned for live updates today, and as always, thanks for your time guys! If you enjoyed today's analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research.
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Starting to look like a stalemate at the convergence point of the long-term and medium-term resistance trendlines. Where do the bulls go from here?
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Extremely muted price action today. Volume is terrible as participation seemingly implodes. As it appears, there's nothing overhead stopping the bulls from taking this to the moon. But, we're stuck at the top of the megaphone. All other resistances have been broken, however, we saw a massive rejection on Monday after we breached current levels. Frankly, I'm surprised larger funds aren't lining up to hedge their YOY gains with Vix with the majors at these levels. What a peculiar economic landscape for funds to be risk on. Something just doesn't feel quite right about what I'm seeing...
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Seeing some notable weakness as we approach power hour...
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We're sitting just north of the 21 period EMA on the hourly (354.75), which means, technically, we're still trending higher on that timeframe. But, the current resistance level is going to bring about heavy selling pressure specifically because of where we are on the monthly timeframe, and within the megaphone pattern. That means massive moves, and most likely to the downside. The next real support is still at 320, and that hasn't changed. I expect a break below 350 imminently...
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The 100 period MA on the 15 minute (355.20), is holding up as strong interim support. If we lose 355, things could get ugly (for a change). Vix is catching a bid here as we approach the close...
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We're getting panic bid at the moment in the final minutes of trade. Vix getting hammered back to a 23 handle. Long-term resistance still holding up. But, the bulls clearly have no intention of letting off the gas...
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That's all folks! It was a fairly quiet day and we hovered around the long-term resistance level/top of the megaphone for the basically entire day. Not much to write home about. Jobless claims are out tomorrow so it should be very interesting to see how the "recovery" is progressing. We're still seeing numbers 4 times pre-lockdown levels, so I suspect it's not going to be good.
Thanks for your time today guys! I hope you enjoyed the analysis.
I wish I could give you more than one thumbs up. You summed up everything I am feeling today.
I knew that NASDAQ was going to fill its gap today and drag the S&P with it, and then I thought it would reverse, but nope just kept going (so far). This market is so bonkers that it is maddening. I swear every week that I am going to stop charting, stop trying to short it, but every week I am right back at it. I feel like the following statement sums it up for us bears.
Insanity is doing the same thing over and over again and expecting different results. Yep, that's me (sigh).
I just know that as soon as switch to bullish the market will drop. It happened to me in June after that FOMO rally. I went all in and paid the price for like a month. Got frustrated and went back to being a bear and thus missed out on all the FOMO. I have never recovered and I am now a cynical bear. Most of the last 4 years has defied reason, so why shouldn't the market continue the same. Good news, bad news, no news is good news for the market!
Thanks again for the post. It really hit the spot.
FYI, this is my chart for today, as you can see S&P f'd me again.
Hedge_Of_The_World
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@Dr_Roboto, Thank you so much man. I appreciate that. I completely understand, and I've been there so many times since the 2008 crash. I thought the FED had at least some intention of unwinding their balance sheet, but nope. Each time it was discussed, it was quickly met with more QE, and dollar debasement. This is definitely the straw that broke the camel's back. If the bears lose the top of the megaphone, there won't be any bears left. That's my line in the sand. I'm down 30% on Vix after last week, and I have a large position. But, I refuse to cover until I see a breakout of the megaphone. The risk is to the downside, and you, me, and anyone looking at this market objectively, are in the right. That's just how I see it...
Dr_Roboto
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@Hedge_Of_The_World, the thing that irks me the most is that 90% of all the action happens in extend hours. All meaningful movements are gap ups or downs. You have to make a bet at the end of the day in hopes you are right in the morning. Or, you get that big drop or rally in the last 10-15 minutes, just like on Monday. Main market hours are like watching paint dry with the hope you can guess the over night action.
Hedge_Of_The_World
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@Dr_Roboto, Completely agree. It's all gap up's overnight, then it's all vol control in the cash market. Price discovery is non-existent with these mutant flows. I've been noticing a lot of brokerage outages lately as well, especially on days when we gap up. So you're allowed to buy, but you're not allowed to sell...
VolkerRules
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Very poetic. Keep up the good work my man. We will get there eventually. All paths lead to one——-> the market will see 50% very soon
Hedge_Of_The_World
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@khushsql, Thank you my friend! I appreciate that. We're so overdue for a correction it's comedic, so I figured I'd do a lighter piece for my readers today. Lol.
VolkerRules
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@Hedge_Of_The_World, Absolutely mate. You are doing a great job at this. I have read each one of your posts. And many of them have made good sense. This poetic piece is absolutely amazing. Dry sarcastic humor. We can short and long the market. But big short is in play. Let the political dust settle and we will see proper action very soon
Hedge_Of_The_World
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@VolkerRules, I appreciate that man, that's very kind of you to say. Thanks for the positive feedback. Perfectly said, the big short is definitely in play. Cheers.
Options360
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Awesome poetry. This made me chuckle. Nobody could have said it better. This market is preposterous!
Hedge_Of_The_World
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@growerik, Thanks buddy! In the middle of moving right now so busy af, but I'll be back at my desk tomorrow. Can't believe we're up again today. This market is hilarious. Lol.
I knew that NASDAQ was going to fill its gap today and drag the S&P with it, and then I thought it would reverse, but nope just kept going (so far). This market is so bonkers that it is maddening. I swear every week that I am going to stop charting, stop trying to short it, but every week I am right back at it. I feel like the following statement sums it up for us bears.
Insanity is doing the same thing over and over again and expecting different results. Yep, that's me (sigh).
I just know that as soon as switch to bullish the market will drop. It happened to me in June after that FOMO rally. I went all in and paid the price for like a month. Got frustrated and went back to being a bear and thus missed out on all the FOMO. I have never recovered and I am now a cynical bear. Most of the last 4 years has defied reason, so why shouldn't the market continue the same. Good news, bad news, no news is good news for the market!
Thanks again for the post. It really hit the spot.
FYI, this is my chart for today, as you can see S&P f'd me again.