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Wednesday, November 24, 2021

The Market Continues To Move In A Predictable Fashion

 The market action is really dull, as expected. It took several hours for the $SPX to pull back to support, and this morning we're seeing that support retested, as I predicted, going into yesterday's close. 

I've taken down all the short term charts in the public charts area, except for the (above) 15 min. $SPX chart. Those charts served us well, but as yesterday's selling accelerated, those charts started to break, and we just have no need for them anymore. 

Knowing which timeline to watch is important, and only comes with experience. It's taken me years to get a good handle on that, and it can still be a struggle, when volatility goes through the roof. Traders who only rely on a 15 min view are completely lost, when volatility gets much above 20. This is the reason I have 20+ different $VIX charts. When a chart breaks, I already have another one, I can rely on. In a market crash, I can go to a longer term chart, and find support, without even trying.       

Yesterday was the highest volatility we've seen since early Oct., yet a 5 min $VIX chart continues to work. that's highly unusual, but things could change in an instant.  

At $VIX 20+ you can easily see 100 point moves on the $SPX . , yet the market continues to move like a snail, and it seems like the $VIX was being held, just above that magic number yesterday, just in order to shake out some short term traders, and trigger some sell orders. 

$VIX (5 min.) - volatility is still expected to come down, and stay below 20, heading into black Friday 

We did see some panic selling in tech, and the QQQ's is an ugly tape. 

QQQ's - slightly oversold, but this 10 min. chart could continue to break. This chart view is a good example of what happens when a short term chart becomes worthless, and you don't have several other timelines to relay on.  

If the powers that be decide today is a good day to pull the rug out, and cause a market crash, all they need to do is break the top of the channel on my DCS chart, but I think they'll wait until after Thanksgiving.

$VIX upper resistance 

If we do see a little panic selling today - on a higher $VIX - then my line in the sand - as far as the $VIX is concerned - is 26.50, and around 127.5 on the $VIX of the $VIX ($VVIX). 

Gold looks like it could get a nice bounce here. Posted the chart on Twitter. 

I'm also watching gold miners again, and added a couple chart views to the Twitter (pinned tweet). 

That's the place to find a link to the daily blog, and any intra-day updates. 

Oil looks like it could consolidate a little lower here, and even back-test the 50 day, after yesterday's big breakout, and If you failed to get the trade right in the first place, then it could be difficult to find a good entry point. In other words,  it look like "you missed the boat". The bullish Oil Chart was blogged yesterday. 

Biotech has been beaten down pretty hard over the past several months, so you may find a nice snap-back rally there... but I can only cover so many sectors at once, and still haven't gotten around to charting biotech. I'll try to update that sector next month, if I see it building a base. 

If I don't see you again on Twitter, have a happy Thanksgiving.

GL, AA  

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