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Sunday, June 26, 2022

Market Update 6/25/22 - Weekly Market Wrap-up

The Sector Rotation Continues 

The rotation out of the energy, and back into tech stocks, continued last week. 

Of course, I've been anticipating this for a while, and I even alerted my paying members to the fact that I was short energy, just before the crash. Conversely, I've remained bullish tech, even at the lower lows, we were trading at two weeks ago.  

 As I explained in my last blog, I rely on the calendar to time market cycles, and Friday was no exception. This was the last Friday of the quarter, not to mention, weekly Options Expiration (OPEX), and here comes yet another Holiday - The 4th of July - and the short sellers are just beginning to feel the pain. What does this mean for the coming week? Probably more of the same. 

How many times do I have to tell folks not to sell into a holiday? Even this so called "bear market" sell-off - that we've seen over the past several months - didn't start until after the holidays!  

Believe me, the market makers don't need any help from the Plunge Protection Team!  Money needed to be put to work, ahead of the summer break, and bullish hedge fund managers need to show that they are invested in - you got it - BIG TECH!  

Energy  - Down 17% in June. That's a biggest decline we've seen in energy, since the crash of 2020.  

$XOP Energy - the final reversal was called as shown. Down on heavier than normal volume. 

Energy takes the stairs up, and the escalator down.

Where are all the con artists who just 2 - 3 weeks ago were being featured on Bloomberg, talking about "cash flow"? Looks like they skipped town, the moment they finished selling their shares to the retail investor.   

You can tell exactly how long they've been planning this dump, by looking at the buying volume spiking on $ERY (Leveraged Energy Bear ETF) around the end of May, early June.  

See the volume spiking around the beginning of the month? 

June 10th, the alert was put out

Looking back at Friday's short squeeze in High beta: 

You know, how I know, that this was a professional hit job, on the short sellers, aka a bear trap? 
$SPHB (High Beta ETF) - they raising the bid just above resistance, at Friday's open, taking out their stops. 

$SPX - 15 min chart view - similar thing as above. Opening bid raised above the trading range.

I see examples of this kind of Wall Street dirty tricks, heading into many holidays, so this is nothing new, and the bears seem to fall for it every time! 

Of course much of what I call out on Twitter is for entertainment purposes:

When I shared the 3X Home builders chart with Jon Najarian, it was only to prove he is wrong, nearly every time he opens his mouth!  In fact he's wrong so often, I'm starting to believe, that he is using his guest appearances on CNBC, as an opportunity to scam the public?  

Thursday June 23rd:


$NAIL - 2 days later - up 25%! 


Getting back to the energy trade 

Why does the overwhelmingly bearish #FinTwit community complain about SPY rallying, instead of just selling the Energy sector? I'll tell you why... it's because, if they don't even have a handle on the easiest trade in the world, then they certainly aren't equipped to trade Energy.   

It takes a lot of time, and energy to, to to trade energy markets (pun intended), and one of the reasons for that is that there isn't an energy related $VIX. There is the $OVX (oil $VIX), but that is even more rigged than the $VIX itself. To give you an idea... Even with the massive declines we've seen in Oil, and the $USO taken down, below the 50 day moving average, the $OVX still ended down for the week. 

So how do I time energy markets, without a corresponding $VIX, to guide me? 

I have several energy charts working, because 1 isn't enough. You got the $XOP. 2. The Oil and Gas drillers 3. The $DJUSEN. 4. The $GJX ($SPX Energy). 5. The leveraged ETF charts. 6. Energy ETF's i.e. $CRAK, and the $OIH, not to mention the $IXE. 7 Individual sector drivers like $XOM. 8. Oil and Gas, itself. 9. The calendar.  

Charting Energy markets is every bit as complicated as charting metals, and miners. It's something that; if I didn't enjoy it so much, you couldn't pay me to do it!   

Of course if I help you make a monster trade, like the several I just outlined above, tips are appreciated, but it's just too much distraction, to sell memberships, and too distracting to try please everybody, all the time. For instance, you couldn't pay me enough to focus on the SPY trade, if that means missing out on a 25% move in $NAIL, or energy.   

Now the question which everybody wants to know the answer to: Can this rally continue? 

I think it can, but probably not in a straight line.   

1. Traders had a reason to buy on Friday, but most brokers have already closing their books for the quarter. Maybe we see window dressing come right off, and money NOT put to work again, until after the 4th, or even after traders begin to return from summer break, in Sept, another window dressing month! 

2. I actually got spooked when I started creating some new short term charts, on Friday, and thinking about AG Merrick Garkand's recent telegraphed visit to Ukraine. What is the real reason for going there, and what are they planning, a Syrian style false flag? Is this a wag the dog moment? Anything to distract from the real problems, and a long list of failures coming out of Washington, not to mention $5 gas.  

AG Merrick Garland visits Ukraine in meeting with top prosecutor leading war crimes inquiry

3. We haven't broken out of the bearish trend, even on a 30 min. chart, and the $VIX remains highly elevated! 

4. As dumb as the short sellers are, trying to sell into a holiday, the stupid machines buy moving averages, like the 50 month moving average on the $XHB home builders. Is that long term bullish? No. 

5.  The DOW and several other markets have broken down out of the sideways range we used to be trading in, and have now traded into a bearish leading diagonal triangle. 

Note: I'm going to be starting a new series on triangle patterns, so be sure to subscribe to this channel, as well as my weekly news letter (still in the works), and rest assured I will never share your personal information. 

6. Another thing I don't like about this rally, is that it was pumped on the last Friday of the quarter. 

The easy money may have already been made, and this is why I alerted people to what I saw coming weeks ago! That was the time to make a donation to the website, and join us at the private twitter feed.  

Major resistance on the $SPX is 3950, but there are several things to watch, other than just the $SPX. 

This week will probably be slow, as traders go on vacation for the summer, and next week - a 4 day trading week - will be even slower. 

I'll have further updates as things progress, and volume starts to pick up again. 

Take Care, AA 



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