Wednesday, May 25, 2022

Market Update 5/25/22 - Does Volume & Volatility Really Need to Spike In Order To Confirm A Market Bottom?

 Does Volume & Volatility Really Need to Spike In Order To Confirm A Market Bottom?

This is the theory I watched one of the Najarian Brothers push on CNBC this morning, and you see this all over twitter as well; the idea that, the $VIX needs to spike, before buyers come in, on heavy volume. 

My take on this: 

I have to laugh because I've been trading the $VIX for over a decade, and only now - in 2022 - does it seem like every retail investor is an expert on the $VIX!  

While it's true, that once you see capitulation - a shaking out of all the weak hands - like we saw during the Covid crash, when the $VIX nearly spiked to 100, and I remember it well, because this is the, "pie in the sky", number ($VIX 100) the bears were shooting for, but that was in the midst of a real crisis, and even government insiders - in congress - were selling...

1. This pullback started around the end of the year - 2021 - because it was finally time to take profits, after the market overshot, after everyone was sent $600 in the mail, and that money went to fund a fake bubble in "Peloton", & "Netflix" memberships, "Robin Hood" accounts, tech stocks, and port loads of Chinese junk, which was no doubt purchased at "Target", "Walmart", and on "Amazon". 

Maybe the smart money took profits, and went on vacation in Barbados? This would help explain the dull market. More on that in a minute.  

2. How many times does the $VIX need to test the top of this range, before we see a return to complacent $VIX numbers? I'm counting 4 times now, since Dec. 2001, and I believe it's the bears who have become, so complacent, at this point, that they don't even believe such a thing (as a return to a normal $VIX baseline) is even possible. No, they actually believe that a return to a $VIX below 20, is a sell signal

I've never seen a dumber trading community as the one I'm seeing in 2022, and the rise of Redditt... and Fintwit, in social media, has a lot to do with that. If you've ever looked into what is being pushed on twitter, as a contrarian, you just have to shake your head.... One day last week, when Bitcoin was crashing, #StockmarketCrash was also trending, and nothing could be further from the truth. And remember when #FAANG stocks were being pumped in social media in 2021? I do!  Where are Twitter's fact checkers when this type of disinformation is being propagated? Twitter has become a den of thieves. And that's one of the reasons you no longer see me handing out many free targets there. BTW Come join us at @3XTradersLive is you want relevant charts, targets, and predictions! 

3. Once again Jon Najarian seems to be using his position at CNBC as an attempt to help his short position, and line his own pockets. This should be illegal, but you see this all the time, and even the fed hierarchy were trading the market, while the whole time they were the ones controlling the narrative. Then they liquidated everything - right at the top. Think that was coincidence? Not to mention the fed member banks who continue their trading operations, the same banks who nearly drove the county into bankruptcy in 2008?!  

4. "NEVER SELL A DULL MARKET" We are trading into the summer break after all, and the market action, even in commodities can only be described as dull, minus a few shakeouts in certain retailers, and tech stocks like $SNAP.  

Speaking of $SNAP - It could be a while before many of these beaten down tech names, snap back, but I like it here, or maybe even a little lower. 

Funny, we didn't see Jon Najarian come on Worldwide Exchange to point out the capitulation in that name, or countless others! 

I can't say for sure that the bottom isn't going to drop out of this market, but I think all the hype being generated is due to an overwhelming amount of bearish sentiment. 

You need real targets, not hype, and emotion, being generated on social media, and by the fake news.

 Join @XTradersLive now, for the low price of $49, and get daily updates, and great calls like this for an entire month! 

Take Care, AA 

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