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Thursday, August 26, 2021

Market waiting for Jackson Hole

 Bloomberg continually reporting "investors waiting for Jackson Hole, but if that were the case, you would see the market rallying every day. The truth is short sellers are covering into the Fed, and the coming Labor Day holiday, as usual, but you'll never hear that reported, because it doesn't sound as bullish. As I pointed out in yesterday's blog, practical every market move is pre-determined by the calendar. Could this time be different? Sure, and that would look like a sell the news event, but I would still expect a short squeeze on Jack Hole Friday (tomorrow), and if the relief rally is delayed, then the market holds up into the holiday.  This is where the $VIX comes in handy. $VIX always comes down, when the Fed offers clarity, and without knowing exactly where$VIX resistance is, takes all the guess work out of it. $VIX breaks out, and continues to pop, sell. $VIX doesn't break out, don't sell, wait. Better yet, sell into a $VIX washout target, and a short squeeze Friday!  

One thing I forgot to mention in yesterday's blog, is that Northman Trader also pointed out - in his latest CNBC interview - that all the market cares about is the fed (liquidity), something I blogged earlier in the month - (Market Update 8/6 - Does the unemployment data matter?). They say, "plagiarism is the sincerest form of flattery", but I think there's nothing sincere about it. 

Moving on to the charts. 

China has settled into a range, or it more or less pinned for the time being, so I'm done with that trade. 

 Financial look toppy, as I pointed out in an earlier blog, and that sector was up again yesterday. I've already started building a short position there, and looking to add more in coming days/weeks. 

If I'm early then I'll be forced to add, but many of these financials have already been treading water for many many weeks, and looking kind of tired.  

$BLK - Blackrock for instance - do they have China exposure? I think so. 

The tech sector is of course the most overbought pig of a market, and the NASDAQ is trading into what looks like a very familiar topping pattern. 

Ill either add the short term chart to the public charts area, or just tweet out the updates, but once that chart breaks, you'll be on your own to try to find a tradable bottom. I'm just too busy to micromanage 1 trade. I have 30 stocks I'm watching, and half a dozen sectors.  

$COMPQ - bearish ending diagonal triangle. You can chart it using your own software and expect to continue trading the range, probably through next week.  

$COMPQ - (same chart) expect a little throw-over (false breakout) at the end of the pattern. Of could most traders will think you've lost your mind trying to short the NASDAQ, just ignore them. 

I'm also still watching metals and miners, but the $USD needs to roll over, and that could take a little while longer.  

$USD - watch for the 92 level to break 

Good Luck, AA 


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