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Friday, March 5, 2021

Market Update - 3/5/2021

 I started a blog concerning the commodities/ Oil trade a couple days ago, but due to the current market volatility, that will have to wait. 

Picking up where we left off on Monday; fear (as measured by the $VIX) remains contained. It was good to see some moving averages - namely in the $SPX and the $SOX - finally taken out, and no doubt many short term traders were shaken out in yesterday's bear raid. I'm not 100% sure the selling pressure is over, but yesterday's panic-selling presented me with a great opportunity to cover some short bets.

Remember, volatility works both way. You can see massive moves in either direction, at these $VIX levels, and if you didn't sell the breakout above $VIX 25, you haven't been following my blog updates.

Watch the 25 level, and expect short sellers to cover, when it breaks! 

Also see the $VIX targets I laid out on Monday, if you missed it.  

On a long term basis the market remains very over-bought, but short term I think the selling is a little over-done, and basically it comes down to, whether the bullish trend is broken (which it's not), and Options Expiration (manipulation) which is only 2 weeks away. Today is Friday, so you don't want to be short going into the weekend anyhow. 

 If you recall: This selling started in China, and spread to several other sectors, although we've yet to see financials correct. This could mean continued mix markets, and sector rotations, as one sector corrects at a time. 

$FXI China

I remain super-bearish energy, but we could see it go a little higher, before a reversal; even if I'm right, in the end. Don't follow the herd, and don't play chicken with a possible wave III! Don't trade Oil, unless you have enough discipline to exit a losing trade. Don't fight the trend! 

Take Care, AA 

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