Market is either choppy or crashing right now... here's a 10 second analysis
1. Blue horiz lines represent targets (support)... according to volume profile we should find some support at this level... if it crashes through, then 312 is next target
We seem to have changed overall market direction. Although, September is historically a tough month for the indexes... I think the swings are just especially challenging (or rewarding) b/c of overall unease about election, covid, worthless USD etc.
Despite recent weakness in the market it seems like we're still in basic recovery channel. Notice back in June we had similar price activity compared to now... the media is also saying how recovery seems to be faster than expected etc. etc. and the Fed is backing off on buying corporate paper. So no... we're probably not about to crash.
TSLA split means one thing... you can sell part of your position and take profit. Everyone is going to do just that this week. Major support at the new 300 price but I won't be surprised if that's where it goes this week.
Remember when AAPL used to go up heavily on news... like the "leak" of a new iPhone design or the promise of something cool? It was such a fan-boi stock.
Trading TESLA has been much of the same... but it seems the news announcements have often been structural rather than just more of the same kind of stuff they've been doing.
The announcements they've made or...
TSLA isn't a car company.
It's a software and energy company.
It's a fanboi stock like AAPL.
Earnings come out on 7/22... my guess? It's going to almost double... to 2K or perhaps 2.4K
Why? Because Elon isn't just building cars. He's building an infrastructure for a new energy future.
Want to hear the bullish case? Try here:
With corona virus cases skyrocketing, and economic damage still not quite measured, the market seems to be doubting this recent rally... which was never a "V" shaped recovery but was recovering all the same.
Yesterday, was a nervous day for all my weekly positions... today did some damage.
I exited all my positions with just 1 hitting my profit target, a few break...
As much as the new Robinhooders and my grandma would like the market (stocks) to always go up.... it looks like the smart money is just beginning to load up on tvix... which normally is a leading indicator to steep down moves in the broader market. Today was deep... I expect tomorrow to be a deeper cut still.
Note the two days previous.. .massive unloading of TVIX... the hedge against sharp downturns and VIX jumps.
Note what's happening now... quietly loading back up on TVIX. Are we getting ready for another pull back in general?
The market does seem to have entered the irrational exuberance phase that's for sure.
At the bottom, everyone is freaking out and selling... VIX is spiking, TVIX is at $1,000, there's "blood on the streets"... it's a level of selling that is capitulation... people are finally suffering too much to hold on to their shares and they sell them... mass selling happens at that moment.
But so does mass buying. The smart money buys at that level.
Looks like SPX500 has decided to leave the trading range and break resistance at 2985 to follow the not very steep recovery channel. (green lines with modest angle up and to the right)
Despite all the people crying foul and claiming the market should be retesting the lows and the economy is tanking. The market isn't at the moment.
For how long will this continue...
I don't see this "retest of the lows" happening.
We have the entire world rearing to get back to work and make the economy happen.
Structurally things are "OK...
I say we go sideways for a while... maybe months... then up.
The over all market is not in a V-shaped recovery, but a more gentle angle, still up... at the moment the SPX is consolidating in the yellow channel. At this instant we're looking at resistance. If it goes above and turns that into support by a re-test, then we're up for a day or two. If it gets rejected, then we're down for the rest of the week.
Recently somewhere on bloomberg or yahoo finance, some article said something to the effect of... "it's common to have rallies in a bear market"
Well... look at what's happening now at the green line (down trend on this 5 year chart)
Make sure to look at what TLT and UVXY are trending towards to get a good idea of over all market direction.
We've had a nice bounce/rally thing going on for a while now, and look what's happening at the "green line"
I predict that next week if not sooner we head back down a good amount.
If you want pre-confirmation (predictive powers) take a look at what TLT and UVXY have been doing over the last 48 hrs.
Lots of people are crying "it's gotta come back!" this week... however:
1. the market has been beat up for a while now so maybe a real rally is underway
2. It's an election year (markets usually go up)
3. fundamentals of economy are actually ok... there are shifts... but US economy is under full steam
(except some pockets)
Where does the big money go for safe haven?
2. treasury bonds
So why are bonds going down now?
Because the money comes back in to the market. Money comes in to the market for one reason... to buy stuff.