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Wednesday, July 20, 2022

Market Update - Wed 7/20/22 - Can We Trust This Rally? $SOX, Energy, Gold, $SPX, $VIX

 I probably should be celebrating, since I've remained bullish over the past several weeks, and now we're finally getting a nice summer rally. Remember when Jon Njarianj was trying to say, that we needed to see "capitulation", followed by heavy volume (buying), and I spent at least a week, dispelling that nonsense? 

Market Update 6/15/22 - Capitulation - Part 1


 I did make some gains in Airlines, and Financials, and even Energy, which I took profits in yesterday.  I'd also be up nicely in $SOXL if I had remained long... but you can't win 'em all I guess. 


And why couldn't $SOX breakout until Options Expiration Friday?  I think you know why... but allow me to refresh your memory. It's for the same reason I laid out just ahead of July options expiration. It's because it's easy to manipulate markets on light summer volume, and this is prime time for Friday short short squeezes. 

Of course the trading apes are confused my the action, because they expect the $VIX to act normally over the summer, but we've seen this story a thousand times. 

$VIX - July 13th

Notice how the above tweet wasn't even liked, because it was deadly accurate! This helps explain why retail investors never win. They think they can outsmart the charts, by trusting their gut.  

$VIX hammered down on July OPEX:  

1. Let's take a closer look at the - totally unnatural - $VIX action on Friday. 

$VIX - 10 min chart view 

Notice how we didn't see the $VIX hammered down to new recent lows, yesterday? That could be, because they're saving their ammo for Friday (weekly OPEX), or is could be that they only intended to drive the $SPX, and every other thing, including Bitcoin, above the 50 day ma. 

Bitcoin - also driven above the 50 day 

The market is rigged 

As you probably know by now, I talk a lot about how the market is continually rigged, and by whom, and when I see Joey bag-a-donuts Terranova come on #CNBC again yesterday, and declare victory... because they knew - as was reported on Tuesday - that if the NASDAQ could be driven above the 50 day moving average, the machines would be forced to buy the breakout. That sends shivers up my spine. If I pulled a stunt like this, I'd probably be put in prison, but on NBC, this kind of blatant market manipulation is celebrated!  

As long as I'm giving away free $VIX targets: I'm obviously seeing support right here, and a lot more support at the 22.50 level. If we see the $VIX run here, $VIX resistance looks like 26.75, and 28. 

If the VIX were to continue to breakout, above the 50 day, then the same programs which were forced to buy this rally, will quickly unwind their positions. I have higher targets, but future $VIX targets are a hard thing to predict. 

I did reveal this $VIX chart, yesterday evening, while doing some extra charting of futures markets... 

$VIX continues to trend up.  Here you see the 22.50 target, as well as a panic target at the top of the range. Of course, I'm giving away a lot here, but not everything, and I'm not interested in micromanaging your trade. Mostly because I'm too busy managing my own trades. 

A previously undiscovered Bearish Channel on the Majors 

Like I said, I was doing some extra charting last night, and I discovered something, I have been trying to figure out for some time. If you're already a pro at this, you'll understand it. 

The trend on the $SPX: 

While most technicians try to draw a triangle pattern on it, it can be construed as a bearish channel. 

The thing that has had me stumped is that the kicker on the channel was absent. By kicker I mean the starting point for the lower channel line, as shown, below. 

$SPX - Looks like a channel pattern developing. but as I was just explaining, there's no kicker, UNLESS you connect it, at the 4500 level! That becomes the new lower channel line, in what will look like an overshoot, below the current lower channel. Makes so much sense, if you've been doing this as long as I have!  


 Of course certain markets do seem to be trading into a triangle, on certain chart views - $SOX for instance - but you really need to experiment with different chart patterns, in order to find the right one. 

I'm not revealing my target on $SOX, because I'd plan to keep that trade all to myself, and anyone else who's interesting enough to pay $100 to my paypal (for 1 months worth of charts). That chart is money, because it is going to ultimately decide the fate of the entire tech sector! 

Final point: Gold seems weak, but Gold priced in Euros has traded into a bull flag! 

What this means for Gold valued in US Dollars, I don't know, but gold miners is one of the sectors that has been used to take the $SPX down, and if the broader market crashes, then so goes crypto, and gold. 

Talk about rigged markets - check out this BS article. Not even 1 gold chart..! 

Wall Street money printers hate gold to begin with, because even retail investors know it's a safe haven, so what do they do. They sell this most hated sector of course! Like I've said before the fed has no intention of stopping inflation, only protecting the soon to be extinct dollar. 

I remain bullish Gold, but we haven't seen too much action so far; not like you would want to see in a bullish reversal. Be sure to checkout my 3 most recent blogs on gold, and precious metals! 

Market Update 7/15/22 Currency Collapse Likely? Red Flags! Gold the next safety trade?

I may end up devoting a page on this website to the gold trade, and that would be linked to a tab on the home page. 

Good Luck, AA 

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