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Monday, September 19, 2022

Market Update 9/18/22 - What to expect in the coming week

I started this update on Sunday 9/18/22, while I was doing some extra charting, and just wrapping it up this morning (Monday).  

Fridays close looked weak, and the VIX, which I wrote about in a separate article on over the weekend... held support, and continues to trend up. 

This is how I got it right, and usually get it right, on a daily basis, by accurately reading the VIX.  

Market Update 9/7/22 - Why is the $VIX so low?

$VIX support shouted out from my twitter feed on Friday

That's right about where it closed, so we may be looking at another downside surprise on Monday  

Tweeted out again last night, when futures were still pointing up. 

Longer tern 

Still looks like the market is trading into a classic bottoming formation 

As I tweeted on Friday:


$SPX - the 3800 target looks good, and that gap fill target seems to be the goal of the so called experts in the lame stream media, who like to make excuses for why the $VIX remains contained, as they usually do, when they're setting a bear trap. 

As I said in my weekend update: 

Only trust the $VIX
(not the so called experts) 

Calling the broader market direction is easy, predicting targets, and timelines, is a lot of work 

Additional $SPX Charts, sector charts, Crypto, Gold, as well as timelines available upon request. Simply make a $100 donation to my personal PayPal, and then PM me.... 

Back to the bear trap: 

All this talk, of selling the market on a contained $VIX, smells like another setup. I can smell BS from a mile away, and the more the pros make excuses for why the $VIX isn't popping, the guiltier they look. I realized this was what I was seeing on Friday, when I was watching a little CNBC.

 I watched a little "options action (the CNBC show) after Friday's close, in order to get a good read on what the enemy is doing, and Carter Worth - the one they now call "the chart master" - which is downright laughable - must have pointed to half a dozen bullish setups, yet he doesn't see the one on the one on the $SPX? I think the only thing I can agree with him on is Gold, because it's testing long term support, and any idiot with a long term chart can see that! 

He may also be right on Oil, and I already called $85 support....     

Of course they all tried to make excuses for why the $VIX isn't popping.

The real reason why the $VIX isn't popping    

  • The breadth of this market sell-off has been very narrow. 

a. Thursday, financials actually ended up.  

b. Friday semiconductors ended about flat. 

c. The energy bears were the biggest losers last week, but energy is not heavily weighted sector. 

Turns out it was the Energy bears who won, on Sept. OPEX, and if you trusted my analysis on Energy and had the guts to buy PUTS, you won big! 

  • Simply put; the bulls are playing some kind of shell game, as they quietly re-baleen their holdings ahead of 3rd quarter window dressing.   

Questions 

I still have a lot of questions about this market, and Joe Biden threatening to use military action, against, yet another super-power doesn't help. 

 Biden says U.S. (forces) would defend Taiwan in a Chinese invasion reuters 


Now that OPEX is behind us what can we expect? 

Was Sept. OPEX the only thing that kept markets from selling off on Friday? I can't tell you that, but the VIX closed around support, and there are still 3 days, before the fed can possibly trigger a bear trap, by coming out dovish. Look the street is pricing in a full point rate hike, and I think we'll be lucky to see 50 basis points (.5%). The fed knows they can't raise rates without sending global economies into a deflationary death spiral, so all they do is stall....    

Charts 

The DOW could barely fill the gap that was left behind in July, and is still trading above 30k, but the charts are pivotal right here: There's more information on this chart than 90% of traders can comprehend, but the charts will no doubt keep me on the right side of the trade, as they since I turned bearish, at the end of 2021. 




The Bear case: If the market starts taking out the June lows, then you're going to see real selling, and even if the DOW rests the 200 day ma, in a short squeeze, we aren't officially out of the woods.  

The Bull case: If the market continues to trade into the bullish pattern we're seeing, and the fed comes out dovish, this sets up for a rip your face off rally, into the Nov. Election. 

Of course option 2 looks 10X more likely! 

The $XLF has only pulled back, just as I predicted it would, and Financials actually closed up on Thursday. as I mentioned earlier. Does this look like a market crash? No


See the obvious bottoming formation?

$DJUSFN (Dow financials) - see the bullish inverted H&S pattern? 




Well then why is the financial fake news, and their so called experts, trying to convince retail investors otherwise?  

  • Wall Street Investors Fear Economic Nightmare, Stock Market Crash, Inflation  BusinessInsider 


  • How to Survive the Next Market Crash wsj

GL, AA 








 so I would not surprised to see futures down. DOW filled the gap. $SOX ended up. Financials ended up lin Thursday. It's a strange market, and that story doesn't get reported. It's just weird. Even OPEX was weird, except thag the energy bulls got burned. But the thinly traded sell-off feels like a setup. We'll see fed reports. $VIX should get crushed...


Wanted to point out the rally from 2 weeks ago, gapping up 3 days in a row, followed by this shakeout. Really didn't make much sense to me, except I did call the it a wave b headfake rally, and so I flipped the pattern and drew a new channel, and it looks like wave a-b-C. What other chart did I find this on UPS. CNBC pumping UPS. Sell FedEx, buy UPS. That's trying to engineer a soft landing I guess. Mention fast money Carter worth Maybe.
Doesn't see the bottoming pattern on $SPX, but sees them every where else? it was easier calling the top, this time, than trying to call the bottom, but it's never easy... 

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