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Monday, August 29, 2022

Market Update 2/28/22 - Taking Another Look Back At The Ridiculous Action Of The Past Few Weeks, and The Weeks Ahead

Taking Another Look Back At The Ridiculous Action Of The Past Few Weeks

Going all the way back to the beginning of this rally, we didn't see a bullish reversal until right after June Options Expiration, which us typical, since every OPEX is rigged, by the big banks, and their hedge funds.  Here I am anticipating the reversal in my June 16th , and June 17th Updates, as well as in my most recent youtube update  

Fast Forward to early August: Market overshoots, and becomes extremely overbought, as the $SPX backtests the 200 day moving average, but then it continues to hold up into - you got it! - August Options Expiration. We did see $SOX, and a few other minor sectors begin to pull back, and that was a tell, but most sectors continued to hold up.... and when I say "minor sectors", I'm talking about miners, biotech, home builders, crypto, and whatever else is quietly flying under the radar.  

Fast forward to the last full trading week of trading in August:
 Global markets are finally taken down, Sun. night / Monday morning around 3AM 

 Of course, Jackson Hole Friday, we saw the rug pulled again, starting in Germany, as I recently laid out in Market Update 8/27/22 Weekly Wrap-up And a Look Ahead

It seems like the market can only pull back, when short sellers least expect it, or in other words, on a Friday, or a Monday. How many Monday morning surprises have we seen, this year alone, and we're to believe the lame stream media doesn't notice this trading pattern?   

When the market can only be taken down at 3AM on a Sunday night, or on a Friday, with the help of Chairman Powell, and the lying corporate owned lame stream media, what are we to think, and how are retail investors supposed to process markets? The short answer is, they aren't...  

I think it's very convenient for the hedge funds to drive stocks into overbought territory, and buy cheap Put protection, as they continue to short the $VIX (for 2 weeks) ahead of the next OPEX, only to dump their holdings at the most opportune time. The trick is thinking like these crooked hedge funds think, and pinning down these critical dates, but this pullback seemed more difficult to time than most....   

 Here's what made this time a little different. Last Monday they allowed the $VIX to breakout, and the sold Germany, but what I think they didn't anticipate was that the $VIX would be sold at the 200 day moving average, and that Buy orders had been placed underneath the $DAX, as the 50 day.... and this is what kept the market from selling off in a panic.

Fast forward to today, Monday, 8/29, the last Monday of the month. We're seeing some further weakness, as I anticipated in the previous update, and where is the market trading? Right at a couple obvious psychological targets. $SPX 4000, and DOW 32,000. Think this is coincidence? 

$SPX - continues to trade above 4000. 

Hopefully this helps give you some insight in to how markets work, and how they're constantly rigged in the houses favor, and this as CNBC and the rest of the lame stream media continues to report bearish fantasies. 

Here's what I'm seeing in the week (s) ahead 

1. I believe we're seeing a little re-balancing act, just ahead of the final month of the quarter. 

2. Money Managers will be forced to continue to chase Tech stocks, and money has to be put to work, as soon as today, since Monday is the Labor Day holiday. Think, massive short squeeze, on bearish news. Yes, bearish news is a bullish contrarian indicator. 

Seems to me, the smart hedge funds will want to get a leg up on the rest of the market, putting money to work right now; even though it's technically not the end of the month, most brokerage houses have already closed their books... and the hedge funds have collected on their bearish weekly Options bets, and are sitting on a lot of cash.  Believe me, nobody is planning to put more shorts on, ahead of a long holiday, going into the end of 3rd quarter window dressing. 

3. Likely sector rotation, out of commodities, and energy, and back into beaten down equities. This again, will provide the hedge funds with a mountain of cash, ahead of yet another short squeezer holiday trading session.    

Of course we could see more selling, once the market fills the gap that was left behind, last week, or even on a retest of the highs of the previous week, once normal trading resumes around mid Sept, I be ready to get bearish again, but I suspect the next Options Expiration date is going to be rigged bullish again. 

NatGas - Natural Gas traded exactly where I predicted is would, on Friday, and looks like it could be in for a nasty correction, now that contract expiration has passed. Watch this bearish Head and Shoulders pattern, and review the past few updates, for more targets. 

Take Care, and good luck, AA 

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