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Tuesday, July 25, 2017

Market Update 7/25/2017

 Volatility remains low, too low in my estimation, and for or that reason alone, I can't recommend a long trade. 

Secondly, the SPX completed a 5 wave move, so you have to anticipate a pullback...

 Note: the 1000 min (200 (5 min) average is being bought, possibly by high frequency trading programs. 

$SPX continues to trade sideways in a tight range, after being stair stepped (unnaturally) higher. 

Another reason I don't like the broader market here, is the possibility that a possible wave "D" overshot the target. And keep in mind wave E is typically a panic wave.

 The NASDAQ (led by tech) made a slightly higher high. I predicted this on Friday, but I wouldn't be chasing tech up here.

The fact that the $VXN (the $VIX for the NASDAQ) continues to trend up, scares me.

$RUT - Last weeks short lived new recent low on the $RVX, followed by it's violent reversal to the upside also  scares me.

The fact that the $VIX is trading at levels not seen since '07 (9.39), ahead of the latest market crash, scares me.

The $VIX has consolidated into a bullish down-turned wedge over the past 2 years. I suspect it's being manipulated, but I'll trust the pattern. Some say the $VIX is no longer a relevant indicator... That's unproven theory, and that kind of talk is usually indicative of a major market top.


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