Volume today and this past week on VXX has been significantly higher, showing accumulation and bullish divergence. Significantly oversold now I think the issue with options today or not knowing about the reverse split pulled in a ton of shorting which should add a short squeeze catalyst to a rocket fueled takeoff. Biden set the primer with a higher tax increase, new bad news will be the trigger and there is plenty of it out there.
On the SPY weekly front we see a massive inverted hammer, RSI of 72 as well as a market outside of its bollinger band. The monthly looks like a blow off top and RSI is currently 73.5 - it is also pushing outside of the bollinger bands. We have not seen the market this overbought since 2018 right before that massive end of year correction. The market is currently priced well beyond perfection and we are now 2.9 standard deviations above the average on the Buffet Indicator, inflation is already running rampant, the fed continues to pump liquidity into markets and ignore the risk it is creating and the bubbles forming on nearly every asset front - a phenomena I dub the "everything bubble." I do not expect this to be THE crash, which I think will come later this year, but we should be looking at a pretty serious correction and I would think a VIX of around 30.
Feel free to agree or disagree in the comments. I have been wrong and lost a significant amount of money going long VXX and UVXY so far this year, so do not take this as financial advice, but the ingredients seem just about perfect for a large VIX jump.
On the SPY weekly front we see a massive inverted hammer, RSI of 72 as well as a market outside of its bollinger band. The monthly looks like a blow off top and RSI is currently 73.5 - it is also pushing outside of the bollinger bands. We have not seen the market this overbought since 2018 right before that massive end of year correction. The market is currently priced well beyond perfection and we are now 2.9 standard deviations above the average on the Buffet Indicator, inflation is already running rampant, the fed continues to pump liquidity into markets and ignore the risk it is creating and the bubbles forming on nearly every asset front - a phenomena I dub the "everything bubble." I do not expect this to be THE crash, which I think will come later this year, but we should be looking at a pretty serious correction and I would think a VIX of around 30.
Feel free to agree or disagree in the comments. I have been wrong and lost a significant amount of money going long VXX and UVXY so far this year, so do not take this as financial advice, but the ingredients seem just about perfect for a large VIX jump.