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Wednesday, November 3, 2021

Market Update 11/3/21 - The Crooked Federal Reserve Reports Today

I must've got my days mixed up in yesterday's update, because, the long awaited Fed announcement is today, wed.! Hopefully this is the catalyst for a relief rally, that results in a stunning bearish reversal. Of course most traders are afraid to sell into strength, and most short sellers cover when stocks breakout, and this is why we typically see short capitulation at a top, and this is the reason most traders consistently lose money. Bulls like to chase false breakouts, and bears are afraid to go short on a false breakout. 

 The Baltic Dry index provides 2 good example of false breakouts, but most markets overshoot, most of the time. 

$BDI - 2 perfect examples of false breakouts. Now we see the $BDI crashing, yet the main stream media doesn't even report it? 

Another thing I never saw reported, is the short squeeze in the $TRAN (dow transports). 

It took me a couple hours to figure out what was going on there. 

$TRAN - see the short squeeze, and the annotation. 

This morning we see the short sellers being squeezed out of Bed Bath and Beyond, and you can bet that the shorts who don't cover will remain trapped through Thanksgiving, and probably into the end of the year. 

This type of market movement is just typical of what we see going into a holiday. 

$BBBY to gap up above res. at $26. 

I've been a long time $BBBY bear, but I kinda like it here, based on the direction of the chart

Something I forgot to mention in yesterday's update was that the $VIX is being sold at the 20 day moving average, but I did mark that on the 10 min. $VIX chart, which is located in the public charts area.   

Gold Miners! I spent an inordinate amount of time, trying to track down the direction on gold miners, and found that the $GDM was being bought at the 50 day moving average, Of course most traders only watch the $GDX, but there are several... and I've decided it's just too complicated a trade to keep up on. If I see a trade, maybe I'll alert to it in my twitter feed, but I'm removing the miner charts from the public charts area. 

It's possible that the broader market holds up into the holidays, since the short sellers are going to be powerless to take the market down on light holiday volume, and low volatility. 

$VIX risk on is going to look like a new recent low (below 14.84) on the $VIX, and 14.10 below that (the June low, just ahead of the 4th of July holiday). $VIX support is 15.38. Res. looks like 17.50 

If I see a $VIX bullish reversal I'll try to alert to it. 

Good luck, AA  

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