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Monday, August 5, 2019

Market Update Monday, August, 5th, 2019 - Part 1

Good morning, Traders!

I have a lot to get to this morning, so I thought it would be good to break up this  update into 2 parts.

Part 1 is intended to get you up to speed, identify some key $VIX (fear gauge) levels, and the short term trade.

Part 2 is going to cover some sector trades, including gold, and the longer term outlook, based on the pattern I'm seeing. I can already see I'm going to run out of time to complete part 2, before the opening bell,  so I'll alert to that update in the annotations on the 1st chart, located in my Pubic Charts area. You can find the link to those live charts in the left hand menu.    

In case you missed last weeks reversal: 

We saw the short term trend break, and the $VIX break out above the 20 level, and it looks like we're going to see another $VIX break out -above that key 20 level - at the open. The $VIXY is also breaking out, so there's real fear in this market. This is why warned investors to get out a couple weeks ago. I'm only surprised the selling didn't accelerate on Friday, and futures are only down 1% on the $SPX, last  I checked. So far, not so bad, but if the $VIX continues to breakout above my next line in the sand - which is the $VIX 24 level - bad things will happen. I'd be watching the charts very closely today!   

$VIX 20+ is a universal sell signal, but if the $VIX comes back down below that magic number you'll see massive short covering, and seeing as today is the fist Monday of the month, we could see the bulls step up, and put money to work.

 $SPX 10 min view

Here's what the action of the past couple weeks looks like on a 10 min chart. You can see where the market broke on Wed., of last week, and testing 2910 support. Next support looks like 2890 (91?), with a washout to 2881 possible - looking a 1 min chart.

$SPX 1 min chart

The 1 min chart seems to be working pretty well, and I may add this very short term chart to the public charts area once I can confirm a reversal.

 The other critical thing to watch besides the $VIX, is the 50 day moving averages on the $SPX (2927), and the NASDAQ, as seeing on the chart below.

I'm out of time!

Good luck, Traders 

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