Of course the financial networks falsely reported that tech was leading the way down, and yesterday Bloomberg TV had some idiot on to try to tell investors that, "the $VIX isn't a fear gauge"! More miss information, disinformation, and false narratives; I think Bloomberg didn't make his billions of dollars being honest, so consider the source.
The $VIX certainly IS the fear gauge, and is commonly referred to as such. It measures the cost of downside protection, in the form of Put options, and it only makes sense, that investors would only be willing to pay more for put protection if one was fearful.
Much of this buying protection is part of the rigged market. The gangsters who organized these kinds of sell-offs - in this case only one week ahead of OPEX - are only robbing investors blind. typically driving the price of Put protection off the chart, and then rallying the market into OPEX. We've witnessed this time and time again. I can tell this selling was orchestrated by the Pro's, by the way they hammered the market into yesterday's close, because this is most effective time to cause psychological angst. When the selling isn't orchestrated, you see short covering into the close, as we saw on Wed., although that rally was cut short. It's not bad enough that the crooks run this game, but then they're invited to come on Bloomberg, and talk about how the $VIX needs to go to 20... and the rest is history. The snare was set, and then they try to blame the President of the United States for standing up to the nuclear threat posed by North Korea, when it is entirely the Fed's comments that was the catalyst for this sell-off. They promised a 2% inflation (target), and failed to deliver, and now uncertainty. When the fed loses credibility, don't expect the banks who own the politicians, and the media to blame themselves. There's always a false narrative and a scapegoat.
Fear is the main driver of markets; fear of missing the next big move to the upside (if you're a Money Manager), and fear that the market is going to collapse, as we've watched it do more than once in the past 20 years. Fear of nuclear war; when it's been known for years, that North Korea has possessed the capability to miniaturize a nuclear warhead... but the networks report this as breaking news! The networks spin the narratives that drive markets, and popular opinion, and the banks are happy to loan us the money to build new weapons systems.
Over the past 3 days of selling, we see the $VIX up over 60%, and I will tell you this; if the $VIX continues to breakout, you're going to see the panic selling accelerate, and the more it costs to buy protection, the more investor panic. It's a vicious circle.
Happily, the $VIX fear is overdone, and the charts are working. This morning I'm seeing futures down only slightly, and looks like the market wants to build a base.
Firstly: The $VIX took out my upside target of $16. Here's the chart from earlier in the week.
Here's the updated $VIX chart as of yesterday's close:
$SPX - testing the bottom of the bullish channel this morning. Self explanatory.
NASDAQ - daily candlestick chart. The bullish trend remains intact.
The Trend on the Dow on a 10 min chart is still intact. Let's call support 21,827, at the bottom of the channel, to be precise. Pink lines are support, red lines are broken support.
The Biotech chart. It's pulled back to support in a little zigzag pattern. Looks like it wants to trade into a broadening top pattern, which would mean a re-test of the highs.
Tech, like biotech looks like it's found support, and could take out the previous high in a powerful wave C, at the top of the larger pattern.
$SOX isn't even broken:
Of course the NASDAQ should follow, and trading an index would present less risk, than a pure sector trade. Problem is I don't have a good handle on the NASDAQ chart.
If you're looking for a safe trade I'd try Canada. $TSX
$Oil - caught a nice short trade in oil yesterday, but I'm expecting a sharp reversal out of wave E, as soon as this morning.
The $RUT: I think you have to buy it here at the bottom of the range.
That should keep you busy going into next week.
Follow my twitter feed for any new developments.
Thanks for your continued support, and have a great weekend!
AA
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