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Hey guys, Happy Friday! No gap up today (for a change), and we appear to be forming an island reversal pattern at the top of the triangle (350). We're seeing some weakness today off the back of a possible Biden victory, but most of the overnight losses were reversed after a stronger than expected payrolls print.

Some of you might be wondering why Vix is down today over 4% today, while markets are all in the red. This happens sometimes when Vix is at elevated levels, and the market calms notably. Vix has a very erratic negative correlation with equities. Every once in a while, when we're seeing Vix above 30-40 let's say, like we were recently, and the market goes from falling 4-5% per day, to falling just 1-2% per day, on the latter end of the sell-off Vix will be down notably, as markets also fall 1-2%. Realized vol is falling, and so regardless of the fact that markets are down, vix can also be down.

Good luck today guys, and enjoy your weekend!

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Comment: 350 is holding up very well as resistance. But, we all know resistance levels don't matter, at least right now, in a market that (seemingly) only goes one way. The way I see it, either markets continue to rise and we all make boat loads of money going long in the stock market, (but all that money buys you is a bag of skittles), or there's an unfortunate shift in the tide coming, that's going to rock the boats. I'm perfectly happy to be net short at these levels, especially if that money is going to be next to worthless anyway. On that note, Bitcoin just came within 5 points of 16,000...
Comment: Every day this week we've gapped up at the open, and then rolled over (marginally) around 11AM - 12:30PM. Today there was no gap up, so let's see what happens as we approach the afternoon session...
Comment: Aaaand it's gone... Just like that, all of the morning's losses have been erased, and the majors are now back to even on the day. We're trading right at the lower channel support line, and outside the top band of the triangle. If we break below 349 again, we could see some heavy selling down to the 21 period EMA on the hourly (345.98), barring a well timed headline that 'everything is awesome'...
Comment: The collateral damage of this week's short squeeze was evident in the Vix:
Comment:
Comment: We're not seeing our usual mid-afternoon sell-off today. We're trading sideways at the moment, and technically just lost the bottom of the intraday channel. The top band of the triangle is still holding up as support, and if this is a triple top unfolding, a 355 handle is still in play, where the all-time high's, and long-term Green trendline converge. If this is an island top reversal pattern, and we're seeing a rejection off the upper band of the triangle formation, then we're going back to 320 over the next week or so...
Comment:
Comment: Volume is quite weak as we approach power hour, and we continue to drift sideways. Let's see if the floor catches up with the price before we end the Cirque du Soleil of trading weeks...
Comment:
Comment: Vix is getting relentlessly beaten lower, and is now sitting at a 24 handle. We're down a whopping 10% on the day. There's no such thing as risk, just don't look down...
Comment: That's all folks! The bulls held the 350 level, and continue to dominate price action. It was an ugly week, with short squeeze after short squeeze, inflicting maximum pain on the bears, only to be followed by more pain. But, the bulls are running out of room here in this historic rally. We're approaching a convergence at the long-term Green trendline, and the all-time daily closing high around 355, which would complete the triple top pattern. I remain one of the few bears left standing, and won't let go of my principles or my 'limited edition' shorts. I trade with discipline, and I'm never greedy, so I see no reason, notwithstanding than the large unrealized losses in my account, to change my position.

I hope everyone had a great week. It was certainly an interesting one, if not a historic week. It's time to unwind, and relax with a cold drink. Until next week guys, enjoy your weekend! Cheers, Michael.
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Comments

i call this a yikes analysis
+2 Reply
@NolossesGod, Thanks for the feedback. You seem to be a hater on this platform, and after looking at a just few of your comments, you appear to have a habit of commenting negatively on your peers analysis if it doesn't match your views. For example, you recently commented, "i have 1k followers in 2 months on stocktwits, link in my bio on the twitter linked to my tradingview. i dont care if u come follow. just saying u are wrong as ffff... see u at 300 shortie :p xoxo". In my opinion, if you have nothing constructive to say, then don't comment. It's quite simple, really.
+3 Reply
I've been expecting a correction since Wednesday. lol. I dumbly got a loose 11/09 loose strangle $140-150 at 3:55pm on Wednesday near close. And it lost like 15% the next day so I liquidated it th am. This is really hard to time in practice. It seems so obvious to me in theory though. Plus, the back & forth in the current events keep mixing up clarity of markets signals. I guess we'll see wassup sooner or later...
+2 Reply
@growerik, You're right man, this week was very strange. We started the week with a gap up, and then gapped up again on Tuesday, before anyone knew anything about the results/contention risks. Blue wave or not, it was always going to happen no matter what the outcome, they just explained the price action after the fact with nifty narratives. I'm down about 20% on my position this week, but that's all part of the game. It's a small drawdown in the scheme of things. If I'm wrong about the trade, then I'll just close and look for the next trade. But, all I see are price action magic tricks, and a divergence of investors attention away from risk. Either way, like you said, we'll find out soon enough.
Reply
growerik Hedge_Of_The_World
@Hedge_Of_The_World, I 100% agree with your thesis, fyi, if that isn’t clear. I’m just saying I failed at it myself. Ha. Have a super afternoon.
+1 Reply
@growerik, Thanks buddy, I appreciate that. I think every experienced trader is scratching their head right now. The market's become a bit of a circus. Sorry if I sound like I'm ranting lol. It's definitely been a long week.
+1 Reply
growerik Hedge_Of_The_World
@Hedge_Of_The_World, It's soo close I'm on the seat of my pants...
+1 Reply
@growerik, Same bro.
Reply
growerik Hedge_Of_The_World
@Hedge_Of_The_World, Fed put I'm thinking gonna pass on this one today. Against my own opinion, it just ain't falling Idunno.
+1 Reply
@growerik, I feel you man. Looks like we're rolling over a bit late today. We just lost 350, and here comes power hour. Vix off the lows...
Reply
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