Page menu

Thursday, August 11, 2022

Market Update August 8th, 2022 - Part 1 - Short Term VIEW - Looking kind of Toppy - was that Capitulation?

 Part 1 - Short Term VIEW - Looking kind of Toppy - was that Capitulation? 

The market is looking awfully toppy here, and I think any retail investors who were short going into yesterday mornings CPI number, probably capitulatedInflation less bad than expected. This was all that was needed to squeeze some retail short sellers.

Of course I saw this coming, and tweeted this out, moments before the CPI release  

Do you think the hedge funds didn't already know what the number was going to be, and haven't been pricing this in for the past several weeks? 

 Capitulation works both ways.  Bears give up at the top, and bulls give up at the bottom. 

I've been focused a lot on commodities, and currency trades, but the $VIX being taken down below 20, and at least a couple of the $VIX charts I've been watching, lines up perfectly with the $SPX 4200 (psychological target), and considering that we've seen mid-august swoons in the past, I'm a little afraid of what might come next. 

2. My sentiment indicators are flashing short term overbought signals, with bullishness being the highest we've seen since March!   

I keep these indicators close to my chest, because these are proprietary information, but I can tell you we have not seen bullish sentiment this high, since April!    

Can the market continue to hold up going into August OPEX, as I've been predicting? Of course that's possible, and I'll get into that more in Part 2, but I think we'll see - at least - a little pullback first.

If you don't think the market can hold up, just look at NatGas trading around 8-9 bucks for the past several months, or the market top in 2021 that took nearly a full year to materialize. 1 week until OPEX is a proverbial piece of sand in the hourglass, as far as trying to time market tops goes.  

This morning we see Disney - of all things - being the catalyst to help lift markets, and I was watching them pump this name bright and early! 

 What's amazing is that only moments later, I watched get punched right back down again. 

"The early bird gets the worm", and I'm often up at 3, or 4 AM, so if you're ever uncertain what is going on, you should click on my twitter profile, and review my earlier time line. 

20 hrs ago 

They say the market can remain irrational for longer than you can remain solvent, and that's true, if you are wrong, and you continue to fight the trend, for a long enough period of time, but at some point you have to start calling tops, and that time is now! Or once the $VIX breaks back out above 20, because just as the machines were forced to buy the 50 day moving average on the majors, the AI will know what to do above the $VIX 20 level, and you can bet programmers were up all night loading the algorithms....

That wraps up the short term view, and this seems like a good place to break for part 2, which I'll link here, when completed 


No comments:

Post a Comment