Wednesday, October 20, 2021

Market Update 10/20/2021 - Stocks Trade to All Time Highs!

 Looks like The financial fake news forgot to report yesterday's all time market high - on the $NYSE - but most traders are overly focused on the highly manipulated #SPY, and the QQQ's, and other nonsense.   

$NYSE - New market high! 

I think the market can continue to struggle at the top of that range for another day or 3, before correcting back to the lower end of the range, but I've already taken profits, and added to my short positions, accordingly. 

My bearish outlook, lines up with what I'm seeing on the $VIX, and futures look weak. 

 $VIX (weekly view) - this chart won't be found in the public charts area. 


The NASDAQ $VIX (the $VXN) can go a little lower. Watch the 17.40 area. 

$VVIX ($VIX of the $VIX) already bounced out of the hole. This was about the time, I started tweeting $VIX charts, yesterday. More on that in a moment. 

Today I heard CNBC talking about investor sentiment taking a dive, but investors no longer have much control over this market; when algorithmic trading makes up 80% of trading volume. In most cases, the money comes out of your paycheck, and it's automatically invested, in tech stocks. The exception to the rule would be, if you're a boomer, living on a fixed income. Then you wouldn't have much, if any, allocation devoted to tech stocks, but you'd still be mostly invested in the rigged US stock market, and you're retirement pension is probably in there as well. That seems like a lot of risk to me, and if I were a money manager, I'd encourage folks to invest in all kinds of diversified assets, including farm land, and antiques, but I suppose there's no way to skim the profits off those types of transactions.    

I've only been trading since 2007, and I can remember a time when the market would predictably trade according to investor sentiment. Sentiment would reach an extreme, and then the tide would turn bearish, until bearishness reached an extreme. I watched this process play out enough times to know that the market no longer trades on sentiment. Sure, I can till use sentiment indicators to recognize an oversold condition, but the machines are in control. Elliott Wave Theory, and pattern trading, no longer works like it used to. You're better off watching moving averages, and Fibonacci ratios, which seem to be the main methods used by the programmers.      

 I've pointed out a lot of this over the past few months, but I'm still trying to wrap my head around, how the pentameters the machines are using to control the market, and I'm getting closer every day. 

$VIX - 5 min. view. - you wouldn't think a 5 min view of the $VIX would work so well, but seeing is believing! See the 50 X 5 min. moving average being sold, even going into yesterday's close? 

I first noticed the 5 min. VIX jump above the 20 ma, on my phone, and at the same time, stocks started to roll over. Then I returned to my trading desk, to have a better look at it, and that's what I found. $VIX res. looks like 16.5 on the 5 min. chart. I think the market doesn't correct until next week, but certain sectors could lead a correction, without most traders noticing. 

Take Care, AA 



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