VXN Refusing to Go Down Without a Fight 8/23/2020
VXN at the daily.
The VXN refuses to close below 25. According to the PCQ, the P/C ratio for the NQ is at 0.62. With that many calls on the NQ, the VXN is recognizing this as excess greed.
What's stopping the VXN from really acting out? High liquidity or a lot of available cash below.
So as long as liquidity remains strong, the VXN will only make small jumps just to stay alive. What this tells me is that the NQ may have some juice left to go long.
Currently, the bears migrated to gather at the NQ and the RTY. So as long as the bears do not give up, the NQ will likely continue to rise - even though the VXN is craving for a correction. When the NQ bears finally give up, that's when you should start getting a bit bearish.
Now why do the bears keep flocking to the NQ? In their minds, they think they can get the most of their shorts from the NQ and tech is overvalued. What they don't know is that the market has a tendency to "sell a dream." The bears keep shorting for their dream of a correction. Little do they know, the NQ was fueled by multiple, multiple short covering rallies. If you look at the stocks with the most short interest, they mostly the big tech stocks. Tesla alone had over $20 billion in short interest.
What's the lesson? Do not trade out of your emotions or some grand dream. The market likes to "sell a dream." In this case, the bears keep shorting out of the "hope" of a crash. It's their shorts that fueled the NQ's rise. What's worse? Most bears will make any excuses just to say they were not wrong.
The VXN refuses to close below 25. According to the PCQ, the P/C ratio for the NQ is at 0.62. With that many calls on the NQ, the VXN is recognizing this as excess greed.
What's stopping the VXN from really acting out? High liquidity or a lot of available cash below.
So as long as liquidity remains strong, the VXN will only make small jumps just to stay alive. What this tells me is that the NQ may have some juice left to go long.
Currently, the bears migrated to gather at the NQ and the RTY. So as long as the bears do not give up, the NQ will likely continue to rise - even though the VXN is craving for a correction. When the NQ bears finally give up, that's when you should start getting a bit bearish.
Now why do the bears keep flocking to the NQ? In their minds, they think they can get the most of their shorts from the NQ and tech is overvalued. What they don't know is that the market has a tendency to "sell a dream." The bears keep shorting for their dream of a correction. Little do they know, the NQ was fueled by multiple, multiple short covering rallies. If you look at the stocks with the most short interest, they mostly the big tech stocks. Tesla alone had over $20 billion in short interest.
What's the lesson? Do not trade out of your emotions or some grand dream. The market likes to "sell a dream." In this case, the bears keep shorting out of the "hope" of a crash. It's their shorts that fueled the NQ's rise. What's worse? Most bears will make any excuses just to say they were not wrong.