If you trade on the smaller TF's it's clear that today was a pretty epic fight between the bulls and bears. We started the day with ANOTHER rejection off of $302 and a shot at the gap that we had just printed. With extended sell pressure we finally broke back into the gap we printed YESTERDAY at open and it was looking like a clear cut rejection off of the resistance line at $302. We found a value zone or support just before it at $297, and as it turns out the bears fumbled and bulls started running the ball back with the bears mounting a goal line defense back around $300. That's a $5.30 move from peak at open to trough mid morning, only to have another $6.60 move higher after the bulls picked up the ball. That's a huge intraday trading range and if you were trying to catch any knifes or sell any tops. There were **** you candles both ways the entire morning until we finally resolved to the upside definitively. This is what i mean by keeping your head on a swivel, these moves are meant to wash you out. Trick trap fool and frustrate.
Big money seems divided on where they want the market to go. There were some big players about in the market today to defend $300/$3000. But ultimately we finished ABOVE $302, which was obviously an important number. Now the trick is the bulls keeping this level. Now that they've taken the 200 MA and $302 These are the numbers i see as the next stops - $304, $310, and the breakdown candle high of $313. If we get above $313 it's open season on bears with no hunting license required. I honestly think we'll take a shot at the highs.
But be cautious. This is a prime rug pull environment. It's always when you're not looking when "they" come up and whack you in the back of the head to put your P/L in the ICU. This move is going to suck in A LOT of people. Most likely retail. It also looked like today we were seeing a lot of short covering as well just from price action at certain levels. People cover shorts, people chase the trade, buying begets buying. I am being extra vigilant around these parts because honestly we all know this isn't where we should be on the chart. But here we are. Also watch for the divergences starting to build. It's a tell tale melt up sign but also a sign that when that rug pull does come it'll be violent. I would also like to note that part of the reason why i see this as prime rug pull environment is the sentiment. Everyone is chasing, and making foolish bullish bets on optimism. Reality bites.
Another note today was again the divergences between the NDX, SPX, and DJI. NDX is still in a corrective phase it seems but the selling seemed a little more elevated today. Now one can point to the current news enviroment (insert article title here) or the fact that a lot of these tech stocks were grossly oversold. I still see this as a natural cycling out or shorting of these names as big money cycles into value, small cap, and cylicals. Which brings me to another point - we were never going to see another leg down with 40% of the NDX, and 20% of the SPX in like 5 names. The fact that these had such a large market cap made it to where you can sell everything else, and the markets would still be buoyed by these giant names. Now, with that being said. If we get a better balance of value in the markets and we get hit with a second wave or some other catalyst there could and probably be another leg down once everyone finally gets settled in their shiny new positions. My .02.
EKG that was today
Solidly closing above $302
Daily with a solid retest of support and close about the 200 SMA and $302
SPX showing the same. Maybe creating a new channel? Note that we did finish outside of the BBands.
ES already printing some bearish divergences on the hourly
ES Daily looking like it wants to take a shot at the breakdown candle high of $3116
Small caps on an absolute tear, next stop is 200 SMA at $147.50
Same with XLF with a clear breakout of it's range
DJT actually gaining it's 100 period MA
NDX with a reaction and bounce off it's long term trend line. Knife caught.
DJI regaining it's 100 period MA as well, notice volume
VIX - Canary in the coal mine. Honestly looks like it could be bottoming with bullish divergences on the daily.
Not even going to mention metals and bonds, nothing's changed.
Overall the market is bullish. We've cleared key technical levels on most of the indexes and it looks like small caps, transports, and banks are finally starting to participate and the large caps coming back down to earth. This is all indicative of a bull rally even into the intermediate term. BUT - VIX is telling us that the rug pull crew is always waiting in the wings. I'm venturing to say we're bullish until we break back below $302.
As always keep your head on a swivel and happy trading.
This is not trading advice. This is my own personal opinon based on my own personal TA.
Big money seems divided on where they want the market to go. There were some big players about in the market today to defend $300/$3000. But ultimately we finished ABOVE $302, which was obviously an important number. Now the trick is the bulls keeping this level. Now that they've taken the 200 MA and $302 These are the numbers i see as the next stops - $304, $310, and the breakdown candle high of $313. If we get above $313 it's open season on bears with no hunting license required. I honestly think we'll take a shot at the highs.
But be cautious. This is a prime rug pull environment. It's always when you're not looking when "they" come up and whack you in the back of the head to put your P/L in the ICU. This move is going to suck in A LOT of people. Most likely retail. It also looked like today we were seeing a lot of short covering as well just from price action at certain levels. People cover shorts, people chase the trade, buying begets buying. I am being extra vigilant around these parts because honestly we all know this isn't where we should be on the chart. But here we are. Also watch for the divergences starting to build. It's a tell tale melt up sign but also a sign that when that rug pull does come it'll be violent. I would also like to note that part of the reason why i see this as prime rug pull environment is the sentiment. Everyone is chasing, and making foolish bullish bets on optimism. Reality bites.
Another note today was again the divergences between the NDX, SPX, and DJI. NDX is still in a corrective phase it seems but the selling seemed a little more elevated today. Now one can point to the current news enviroment (insert article title here) or the fact that a lot of these tech stocks were grossly oversold. I still see this as a natural cycling out or shorting of these names as big money cycles into value, small cap, and cylicals. Which brings me to another point - we were never going to see another leg down with 40% of the NDX, and 20% of the SPX in like 5 names. The fact that these had such a large market cap made it to where you can sell everything else, and the markets would still be buoyed by these giant names. Now, with that being said. If we get a better balance of value in the markets and we get hit with a second wave or some other catalyst there could and probably be another leg down once everyone finally gets settled in their shiny new positions. My .02.
EKG that was today
Solidly closing above $302
Daily with a solid retest of support and close about the 200 SMA and $302
SPX showing the same. Maybe creating a new channel? Note that we did finish outside of the BBands.
ES already printing some bearish divergences on the hourly
ES Daily looking like it wants to take a shot at the breakdown candle high of $3116
Small caps on an absolute tear, next stop is 200 SMA at $147.50
Same with XLF with a clear breakout of it's range
DJT actually gaining it's 100 period MA
NDX with a reaction and bounce off it's long term trend line. Knife caught.
DJI regaining it's 100 period MA as well, notice volume
VIX - Canary in the coal mine. Honestly looks like it could be bottoming with bullish divergences on the daily.
Not even going to mention metals and bonds, nothing's changed.
Overall the market is bullish. We've cleared key technical levels on most of the indexes and it looks like small caps, transports, and banks are finally starting to participate and the large caps coming back down to earth. This is all indicative of a bull rally even into the intermediate term. BUT - VIX is telling us that the rug pull crew is always waiting in the wings. I'm venturing to say we're bullish until we break back below $302.
As always keep your head on a swivel and happy trading.
This is not trading advice. This is my own personal opinon based on my own personal TA.
