How about that rip your face rally, we finally got, in several beaten down sectors, yesterday? It's a shame we had to wait several weeks for it, and trade flat for several more days, but I suppose it takes time to load the algos (algorithms).... ahead of a good CPI number. No doubt Goldman Sachs and other embedded deep state actors knew what that number was going to look like weeks ago, and in hindsight it explain the lack of fear we've seen in the market, over the past few weeks.
Speaking of Fear
One thing I forgot to mention, in yesterday's update - from my notes - is the the CPI may be a catalyst for the $VIX to sell off, and that's exactly what we saw happen. Like I said yesterday, there was little fear in the market to begin with... always trust the $VIX, not the hedge funds paid trolls, on twitter.
Looking at my notes: I obviously have a lot on my plate this morning, and still updating the charts; I wanted to check the golden dragon chart... I know China re-opening is old rumor/ news at this point, but this was one of the catalysts for yesterdays massive rally, in beaten down tech stocks.
Golden Dragon up 7.5% yesterday. Not bad! Sorry, can't show you the chart, but you probably aren't trading China, anyways.
Better Late Than Never
Big Tech Finally Leads
I was actually long big tech, and short Brazil, yesterday, and I got paid handsomely on both!
$FNGD (3X FAANG Stocks) - up 26%!
$BZQ (3X Brazil Bear) up another 16% - up 30% from where I purchased it!
One of the biggest winners yesterday was the Crypto market, once again proving that the time to be greedy, is when others are scared.
Did you know that CNBC fast money has been encouraging people to short tech stocks, while continuously pumping the energy sector? It's no wonder they didn't have much to say about yesterday's rally. However, they did mention the massive rally in Home Builders, and we know this sector is one of Jon Najarian's favorites. He's no longer on the show, but remember what I was saying yesterday, about his, "conspicuous absence"?
$XHB (Homebuilders) up 10.65% for the week. The weekly chart below hasn't been updated for a while, but it's working as expected.
Something to note on the housing sector: Notice that while the lame stream media continued to report that the market was taking out the June lows, the housing sector only pulled back to the higher low.
$NAIL 3X Home Builders up 33%! This leveraged fund turns out to be a pretty good performer, but sadly there is no matching 3X short fund to swing trade....
Looking At The Bigger Picture
What we saw yesterday was just another engineered short squeeze
Scared money continues to cling to energy stocks, and as long as that continues, then money isn't going to be put to work in other sectors. In other words, we're not seeing, "a risk off environment".
$SPX - The S&P 500 is only trading 50 handles above where it was trading last week, and the Wilshire 5000, only a lousy 300 points? Maybe this rally still has some life in it, but I'm still looking for a larger pullback.
This morning we see the $SPX testing the 150 day moving average. Yes, fast money traders actually watch this level, and probably because they know retail investors don't...
Another level to watch is 3950
$SPX 3995 is a key psychological level, we saw taking out in after hours trading, but you know the bulls have their sights set on the next round number target, 4000!
Market futures up .75%. #Oil futures up 3%. $SPX #ES1 "3995" pic.twitter.com/VphL8ZvlCF
— Veteran Market Timer (@3Xtraders) November 11, 2022
Bears Trapped
I have no doubt the market will continue to hold up in to this weekly Options Expiration Friday.
If we see a little pullback, then there's support at the breakout point, and more support at the 3900 level, but I think the earliest time we could see profit taking is next week
Today's a Banking Holiday, and that's one of the reasons the market was run up, on Thursday. Many Traders have the rest of the week off.
Things to watch:
1. The $USD aka the DXY - the sell-off in the dollar was the main driver of yesterday's rally, even more-so than the $VIX
2. The $VIX
3. I forget what #3 was; Oh yeah, Canada!
$TSX Canada - if Canada can collapse along with the mining. and oil sands, then that money can be put to work in other areas of the market, and this rally can continue, otherwise scared investors are going to continue to hide in so called "safety trades".
Have a great weekend,
AA
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