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Friday, September 29, 2023

Market Update Seeing Capitulation

 First off there is a lot going on in this market:

1. Oil is trading at 1 year highs. 

2. China is trading near 10 month lows. 

3. The bond market seems broken. 

I could go on... 

Looking at the short term charts      

The bottom I called  - in real time - on Wed. - Documented in yesterday's update - not only held, but the rally continued to gain steam on Thursday.  

There's a good chance we're in wave 1 since nobody seems to believe in this rally, but there is a high probability that we're only in wave A, at the beginning of a little counter-trend rally - in wave 4 of C. 

For Example   

$COMPQ - Assuming wave C is going to look like a textbook 5 wave move, and chart says yes... If you're unfamiliar with Elliot Wave theory, I suggest you learning it.  

 


The broader market is looking pretty good here, as I was saying yesterday. 

Of course we didn't get anywhere close to capitulation - not even close...- and stocks are not oversold, but the CNN indicator was giving an extreme fear reading....


I've pointed to the CNN fear gauge in the past, but I think it's important to consider the source (CNN) and take it with a grain of salt.   

Capitulation 

One thing CNN's indicator does measure is the scared money, hiding in money markets, and that's someplace I no longer want to be. If you remember, I moved the 401k to a safe place, back in July, and that's where it's stayed, up until now. 

BUT the chatter on bond yields has reached fever pitch! This has gone on for several weeks, so I'm confident we're seeing capitulation in that space. 


401k trades adjusted: One place I put money to work is the most beaten up Bond fund I could find. Another place I'm moving money to, is beaten up small caps, which - if you recall - I got out of back in July.

TODAY'S TRADE 

I'm not expecting a big short squeeze today, but maybe just enough to draw in some more dip buyers, ahead of next week. 

We should also see money put to work on Monday, and then we should have a better idea of where things stand.  

Finally The $DAX  

As you probably know, the $DAX leads global markets, and especially Europe, and I've been using the $DAX as a leading indicator for several years, and I'm ready to start trading $DAX futures. 

Last night was a no brainer, as the $DAX was seen pulling back to support: 


Tips on Trading the DAX - linked - Great Article from dailyfx.com 

Take care, 

AA 





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Thursday, September 28, 2023

Best Speculative Trade of the Year!

 If you don't know what a speculative trade is, it's a longshot; high risk/high reward, and a higher than usual risk of losing your entire investment, so invest accordingly. In other words don't bet the farm when betting on speculative names. 

The highest risk investments are in stocks that trade below $5, and sub $1 names - aka penny stocks, most of which are in all probability, on their way to 0 (zero), because institutional investors don't invest in this junk. 

Best Speculative Trade of the Year!   

If you follow me on Twitter then you probably saw me doing the happy dance, after yesterday's open, after hitting the lotto in a little AI stock called ShiftPixy $PIXY. 

With a name like that you know there has to be a lot of short interest, so it's no wonder we saw the stock pop 185%. 

I happened to be a little overly invested in this name, after repeatedly adding to my position, over the past several weeks, and I made out like a bandit - as they say. Risk works both ways, and sometimes if you're lucky, you win, and if you're very lucky, you win BIG!  


By the afternoon, I could be seen kicking sand in the short sellers faces, and rubbing salt in their wounds: 


As if that wasn't enough; I also called the breakout on the $SPX, and even updated over 100 stock charts, and tweeted 100 chart views, and all on only a few hours of sleep. 

$SPX

$SPX breakout confirmed 


$SPX Rally Faded 

That rally was cut short - and you would never guess where - at the 200 (min.( moving average, on a 5 min. chart. 


Market Update

Am I going to hang my hat on a breakout on a 5 min. chart? No 


The market looks bottom - the opposite of toppy - but they  (the crooks.. ) - usually like to break the charts, and I see the $SPX target they're shooting for. 

I even tweeted it: 


I'd say there's a 50% chance of a lower low, on Friday (another weekly OpEx and the last trading day of the month), but only a 10% chance that this sell-off continues to gain steam. 

Others are more bearish:

The S&P is heading below 3,000. Basic math (and a metric beloved by famed economist Robert Shiller) suggests it yahoo

Oil & Energy 

Today the Oct futures expire, and we saw money pile into energy again yesterday. Some of that may have been some last minute 3rd quarter window dressing. 

Rigged Market Alert

Good luck,

 AA


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Wednesday, September 27, 2023

Market Update Hump Day - The Selling Continues

 Wow, we've gone from boring markets, back to exciting markets in only a couple days, but this is what happens when traders return from Yom Kippur, and pick up where they left off, on Friday. 

Didn't I tell you that when traders returned from their long summer vacations, they were going to trash stocks? I'm sure glad I told people to sell the summer rally, as I also did!      

Yesterday's action 

I knew who was selling yesterday, before they even showed their hand on CNBC Fast Money. East coast traders....   

I actually alerted to the $VIX breakout around 10:30 AM, and the selling accelerated from there.  

Of course, the $VIX continues to trade below the 20 level, which is relatively low, and that's because there really isn't much fear in the market. This may also have something to do with the 0 day expiration options market, but I'm not sure... 

I can tell you that they didn't have any trouble driving the $VVIX to new recent highs.

$VVIX ($VIX of the $VIX)

$SPX - 5 min. chart view - tiny moves  


I think the $SPX can sell off a little lower, before we head into buying season. 


Tech is Trashed 

I pointed to Amazon, when the selling began, and I'd be a buyer here. 

Every Money manager on Wall Street wants to own this one at a discount!  

New Leadership 

Funny thing, after yesterday's closing bell; I was looking around at some of the damage being done to this market, and the selling has been very selective/ targeted. 

Of course Apple ($AAPL), and Amazon were among the biggest short term losers, but that's just the tip of the iceberg! 

1. 

2. 

$UPS - this one is probably being used to drive the Transports lower 

3. 

$UNP - ""

4.

$TSE - boy does this chart tell a story! 

5. 

A better example of beaten up stocks, that are beginning to look interesting might be 

Peloton $PTON  - I haven't updated the chart in months. It just is what it is - up 5% on a down day. 



I have countless similar examples; and I think the market is setting up to appoint a whole new group of leaders, as we trade into 2024. 

I'm so excited after finding this, that I could hardly sleep, and I have countless charts to sift through. 

I even created a new folder dedicated to this group, of heavily beaten down stocks.  

I'm out of time,

AA 


 

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Tuesday, September 26, 2023

It's That Time Again! Time For Another Government Shutdown?

 It's That Time Again! Time For A Government Shutdown?

No, it's time for buying volume to pick up, now that Yom Kippur has passed, and hopefully we don't have to wait too long, because Tom Petty said - it best - when he sang "Waiting Is The Hardest Part".

I digress, but the market was super slow again yesterday, and the fake news adds insult to injury!  

If you caught yesterday's market update; then you already know why the market hardly moved on Monday, and just as I predicted, the lame stream media didn't say a word about the Jewish Holiday.

They were instead seen ramping up the negative news on Chinese real-estate developer Evergrande, while at the same time pointing to the next big holiday over there (Golden Week). 

Evergrande’s plan to stave off collapse is running into trouble cnn

I guess it's a good thing, I'm not long Chinese real-estate... I just wonder if this story hasn't already been priced in, as so many reports we hear repeated for years on end are (rhetorical)?  



Also In The News: 

 
The threat of a possible government shutdown, if the progressive party doesn't get their way. Of course they're going to blame the republicans for this one, as usual. 

Here's my take on that: 

The UAW strike persists, and Senior Biden encourages it! 

Biden will join the UAW strike picket line. Experts can’t recall the last time a president did that AP

8-9 people seen carrying signs


Do we really need "experts" to weigh in on this shit-show? LOL   

I digress, but where there isn't any real market movement to comment on, I'm left to analyze the fake news. 

Going to the charts  

$INDU back-tests the 200 day moving average, filling a gap - on the chart - that was left behind, back in August. The Dow actually ended up for the day, painting a bullish hammer candle. 



All you need to do is go back to  late May 2023, to see why this test of the 200 day ma is important. 

I was going to alert that Dow target yesterday, but it seemed so obvious I didn't even bother... 

What I didn't realize is that this was going to result in 3 - count 'em 3! - bullish indicators, not to mention a bullish mid-day reversal! 

It's no wonder CNBC was seen this morning, pointing to market futures in the red (sense the sarcasm). 

It doesn't take a genius to read this market 

Tiny market moves, on light volume/ volatility; ahead of the holiday season; all points to bullish consolidation. 

How dumb is this tweet? 


Looks like another bear trap, as I've been saying all along; I suppose the most hated rally of 2023 will be off to the races again, soon! 

Take care, 

AA 

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Monday, September 25, 2023

Trading into the end of the quarter

 Something I forgot to mention in Friday's update, is that the selling we've been seeing, just looks like a simple rebalancing, as we trade into the end of the quarter.  


As most of you probably already know, I'm all about trading the calendar, and for good reason!    

'Sell Rosh Hashanah, Buy Yom Kippur' Strategy Makes Dramatic Return In benzinga.com


There's something you won't here reported by the corporate owned lame steam media! 

Another thing I didn't hear reported was Friday's rally in Chinese stocks. Was this short covering ahead of Yom Kippur? 

 

Here's something else you won't hear reported by the rats in the MSM 


Friday's action ended weak as expected, and I used that weakness to my advantage, taking profits on most of my remaining short positions, in the final minutes of trading.   

$SPX - retests Thursday's lows, at the close

Looking back at last week, we only really saw 2 days of heavy selling, although technically it was a 6 day losing streak, on the $NYSE 

$NYSE - See the shakeout just below the 200 day moving average.



That becomes the level to watch/ trade.  

Here's something that's worth watching on October 4th: 



Although I don't believe this test will end up looking like a real emergency, I do believe that the next psychological operation (PsyOp) is being planned for 2024. 



Take Care,
AA 

 
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Friday, September 22, 2023

Weekly Wrap-up: Good things happen to those who wait.

Yesterday Thur. - the sell-off continued into day 2 - day 3 for energy stocks - and the selling accelerated into the close.  

It's good to see energy finally pull back, and right where fast money - back on Sept. 14th - claimed they were bullish. 

Speaking of CNBC Fast Money 

I watched a good portion of the show last night - as I was fixing dinner - and it was pretty good, for a change. The host even questioned the official narrative - "hawkish pause", Guy Adami, pointed to the broken bond market, and they even had Rick Santelli on, and you can catch what he had to say in the video - linked to the CNBC tweet - below.

 To be honest the bond market is a bit of a mystery to me, so I'm always happy to learn more about it. 

Getting back to this sell-off

I kind of figured - after the long summer break - the powers that be, would want to trash the market, before putting money to work, and they must have seen this period between the latest FOMC meeting - and Yom Kippur - as their golden opportunity.

I didn't even need to look at the calendar to time this sell-off, because I simply trusted the $VIX, and I'm looking like a genius; after telling investors to put protection on at $VIX 13.

To document: 

Tech stocks 

Amazon was trashed along with AI stocks, and everything else I warned folks not to chase, back in July. Yesterday, I pointed to a leveraged bullish tech ETF on twitter, but I've since deleted that tweet.  

$AMZN 



Good things happen to those who wait 

I've already taken some profits on my short positions, and I'm carefully tip-toeing into some beaten up sectors. 

I would be happy to reveal those trades, if traders supported this channel, but I'm not going to give away my best winning trades for free. 

$VIX 

I did give away yesterday's $VIX target, and I encouraged investors not to panic. 

Friday

This morning we're seeing dip buyers step in, but because of the fact that the selling has been highly orchestrated, I wouldn't expect to see the bears get paid on their weekly options, on this Friday. 

Expect to either build a base, or close near recent lows, in a panic close. 

Take care, 

AA




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Thursday, September 21, 2023

What is that?

 To be clear; I'm not long tech stocks, but what kind of fake news release; in order to trigger the AI; in order to help facilitate a pullback... is this?

Broadcom falls on report Google mulls dropping co as AI chip supplier reuters.com

Right away I can tell this is a poorly written excuse to sell tech. Who says "mulls"..?

Read more »
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Wednesday, September 20, 2023

Trade Like A Hedge Fund

In Order to get up to speed on today's update, you may want to review yesterday's update: 

Big Bearish Reversal Confirmed; Bitcoin, Commodities, $SPX, $Oil, $VIX, Cocoa


Picking up where we left off:

As I've been talking about over the past several months - even before it had become clear that volatility is being aggressively sold; through the use of 0DTE Options - why anyone would continue to cling to the $SPX/ SPY  trade is beyond me! 

Every day it's the same old shit, as I summed up in my blog entitled Groundhog Day Markets continue...   

Yesterday's action, looked the same as any other day
What's the solution? 


Trade like a Hedge Fund: 

Drive tech to new highs on light summer volume, with the help of an "AI Boom" story, and then do the same with thinly traded energy stocks, with the help of a "Saudi Oil Cuts" story. Think the Saudis aren't in on this scam? I'll bet Goldman Sachs has a direct line to the Saudi oil minister!    

Remember when they drove Oil contracts to 0, on the idea that Russia, and the Saudis were in a race to see who could pump the most oil, and investors swallowed it hook, line, and sinker. 

And then there was the time when they drove Oil to new highs, just ahead of a financial collapse, on the "Peak Oil Theory", story. I guess nobody saw oil sands coming - being sarcastic.  

The Next Trade 

I can't tell you exactly where the next sector rotation will take place, but with a little due diligence it shouldn't be too hard to find. 

Small Caps is just one possibility, as we continue to see heavy selling in this sector. 

Retail is another, as we see retail being crushed ahead of the holiday shopping season, but I have many things I'm watching, and - as usual - I'm keeping my cards close to my chest.  

Getting back to commodities trading 

Trading commodities probably isn't for the average investor. In fact I know it isn't!  

There's an old saying; "a fool and his money are soon parted". 

Trading commodities has margin requirements, and trading on margin requires proper money management, and extra discipline, and that's going to be a deal breaker for most retail investors.

Oil  


I've been killing it! In other words, I've been right all along. From the continuing rally to near $96.

This morning 



Wait! Breaking news: Jim Cramer is a technical oil trader now! 

Don't bother clicking that link, CNBC will want you to pay to view the  content, and I can tell you that he's calling the top in oil, just as he did last Oct. Must be a seasonal thing....


Of course, I'm probably not going to be giving away any more free targets in oil, or even Cocoa targets, for that matter, but this I can tell you, bullish traders always buy the dip in a bearish reversal, because - to 90% of traders - it looks like a pullback.  

This time should be no different, so Oil is already poised for a powerful snapback rally on another weak (dovish) fed announcement.

Cocoa 


After doing a little digging; I found I can actually trade most commodities - including cocoa - using Schwab (TD Ameritrade), but there are several other alternative options... 

Take care,
AA 


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Tuesday, September 19, 2023

Big Bearish Reversal Confirmed; Bitcoin, Commodities, $SPX, $Oil, $VIX, Cocoa

As some of the long term followers of this blog probably already know, I chart everything: 

1. Emerging Markets

2. Currencies - including Crypto, Treasuries 

3. Commodities, 

a. Oil, distillates, Natural Gas, 

b. Metals, Gold, Silver, Platinum, Uranium

c. Agriculture (AG), including Wheat, and Corn, and even Cocoa, Sugar, and even Cattle.  

I'll bet you didn't know that the biggest bull market isn't in Oil, it's in Cocoa! 

That is, up until yesterday's big bearish reversal! 

$COCOA - bearish reversal 


I suppose if the lame stream media pointed to the cocoa trade every morning, like they do the Oil rally, there might me more interest in trading Cocoa, but good luck even finding a way to trade it. 

That brings me to my next point. 

What's the best platform for trading commodities?  

TradeStation seems to be one of the biggest ones 

eToro is another... 

If you have any suggestions; message me. 

I'm currently using TD Ameritrade, but I'm looking to expand my trading into all commodities, and even foreign markets. 

Looking At The Broader Market 

They - whoever they are - continue to buy the SPX futures at the 4500 level, and this could continue into the end of Sept. - window dressing season, especially if the Fed comes out with a dovish statement, and the UAW strike comes to an unexpected resolution.   

$VIX 

Monday's (yesterday's) action looks like a bullish reversal, as the $VIX was sold at the 50 day moving average. It was so obvious I didn't feel the need to tweet it.  

At precisely the point where the $VIX was hammered; both the $SOX, and the $NDX bounced out of the hole, so it looks like Friday's bull trap ended with a bear trap. 

Funny, Carter Worth - of CNBC Fast Money fame - apparently failed to recognize the triple bottom on the $VIX, until over the weekend, so anyone trading his late call was caught in yesterday's bear trap. 

Like I already stated, I still think we're setting up for Sept window dressing, on the back of a dovish fed, and an UAW deal.   

Bitcoin 

Looks like another pump n dump money raising scheme, just ahead of the Fed announcement. 

In other words; it looks like money managers have returned just in time to drive bitcoin up, in order to raise some cash. This is what hedge funds love to do - pump n dump thinly traded markets.    

$OIL 

Hedge funds also continue to pile into oil, but I suspect they're about to pull the rug on that trade. They're already building massive short positions in Energy stocks.

Of course Bloomberg only reports the bullish oil part of the story. 

We're closing in on the $96 target, I pinpointed over a week ago. I'm only surprised how long it's taken to get here. I think I've never seen Oil move slower! 

 Take care, 

AA 

  


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Monday, September 18, 2023

Market Update Monday 9/18 - Bull Trap Confirmed

First off: It was good to see volume finally pick up on Friday, after months of summer doldrums.  

To get you caught up to speed: 

We saw the market give back most of last week's gains, on Friday, which was not at all surprising after the warnings I put out there, on Thursday.

$VIX red flag spotted on Thursday  

$SPX red flag tweeted Thursday  

$VIX - bull trap triggered at Friday's open 

$SPX 50 day moving average sold. 

Dow 50 day moving average sold, on decent volume.  

Bull Trap confirmed 


And by the end of the trading day, Bloomberg was seen reporting that the market had sold off for the 2nd week in a row - which is debatable. 

Sure, if all you're watching is the $SPX it technically closed down .16% - for the week, but reporting it as some sort of bearish trend is highly deceptive.   

 $SPX - weekly - Bloomberg tries to make the current trend sound bearish  


Speaking of  Bloomberg News Spin    

This morning Bloomberg is seen peddling Dr. Doom Nouriel Roubini, and they even asked him if he would be long, or short US equities? He said he would be short, going into the end of the year. 

 I'll leave it for you to decide what that means.   

The Fed

This week, ahead of a midweek Fed rate decision; expect more sideways consolidation  

Then on Wed. expect the Fed to continue the pause in interest rate hikes. 

That should be good for a relief rally, at least. 

Take care, 

AA 


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Thursday, September 14, 2023

Market Futures Update Ahead of the ECB Decision

 I had no idea the ECB decision was/is this morning, until I saw it from the useful idiots on Bloomberg. 

I obviously need a better economic calendar than MarketWatch can provide. I mean this is the most important event of the week, and 1 day before Sept. Options expiration. "Need the info"! 


I believe the ECB is on hold, using the recent downgrade of EU growth (estimate) as an excuse, although the market thinks a rate hike is 60% likely. 

But none of that really matters, because the market can't hear any bad news. All news is good news. 

Game plan:

If tech stocks get trashed on an expected ECB hike, then energy is going to rally. 

Oil is already breaking out....

$WTI (US crude)  - 1 hour chart view -  the next breakout point looks like 90.01. 


Also

Watch the $VIX, which was punched down below the 13 (edit) level yesterday! 

Also see the pullback target for the $SPX - provided in yesterday's update 

If the ECB doesn't hike rates, then both tech and energy can continue to rally. 

Take Care, 

AA   

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Wednesday, September 13, 2023

Market Update $SPX, #Oil

I was hoping to see the market move more normally, now that summer is over, but it looks like the powers that be, are going to take their sweet time building positions; while they prepare the next bearish news story. Yes, the same people who drive the markets, also own the news.  

Oil

Oil continues to run, so Bloomberg only reports the bullish part of the oil story. 

Wall Street Journal used to be a good publication, but this morning we see them fueling the mass  hysteria. 

This is all reminiscent of the recent AI boom story which everyone now seems to agree marked the top in the summer tech rally, so the news is a contrarian indicator, as usual. Headline risk.

Speaking of Bloomberg, I heard one of the talking heads mention the golden cross indicator yesterday.

They're actually spinning a bullish story because the technical traders - behind the scenes - are pointing to technical indicators. 

We've seen this story before.

Going to the charts 

$DBC - commodities - perfect example of what I was just talking about.



OF course you can also find these golden cross indicators on other charts, including the Bloomberg commodity index. 

I'm also watching what looks like a possible topping pattern developing 

Looks more like a bearish ending diagonal triangle this morning


The $96 target is still on the table, but no one chart view is going to give you the entire picture. 

The Broader Market 

$SPX futures now drive the entire market thanks to 0 day expiration options, as I recently blogged about, and intend to alert to in the next newsletter. 


I'm expecting the 4500 level to hold, going into Options Expiration Friday, but then I believe we are going to see a sharp correction, back to support.  

This update has run past the opening bell. Looks like my forecast is correct, after watching the bears  - unsuccessfully -  try to sell the CPI data release this morning.  

Take care, 

AA 


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Tuesday, September 12, 2023

Market Update Technical Tuesday 9/12/23 - Oil, Bitcoin, $SPX, Apple, $USD

Yesterday marked the end of summer trading, and the first thing we saw yesterday was investors chasing overvalued tech stocks again (eyeroll). 

Speaking of overvalued tech stocks: 

As Smartphone Industry Sputters, the iPhone Expands Its Dominance nytimes

I think most investors could care less about the new iphone, but the stock has been walked down to support, and that sets up for continued bearish consolidation (to the upside), and just in time for Sept. Options Expiration. In fact with the big move we've seen in Apple - over the past several weeks, consolidation may continue, right into the holidays.     

Of course Apple is one of the main drivers of the QQQ's, and the $SPX, and that's the whole point of driving Apple higher. 

There are other Q components I like better, but watch for Apple to breakout above resistance 180.88, some time between now, and Nov.    

We saw Oracle taken down on worse than expected earnings - #BOOM! 

Speaking of takedowns

Bloomberg finally got what it has been wishing for, for the past 2 weeks: 

Typical Monday morning surprise - rug pull. 

Looks like the plan is to give the appearance of a bull market in US equities, through a weaker dollar, and that could be good for Gold. Something to watch, with Gold trading at a round number target $1900.  

Speaking of round number targets Dow 25k 

The Broader Market 

I thought we may see industrials lead, but the Dow was immediately sold at the 50 day moving average. 

$SPX futures are down slightly, but still trading above 4500 this morning.  

Yesterday, it was bought at the 20 day moving average, and by the close, it had been driven back above the 50 day ma.  

Oil is back up around 1%, but the biggest move we're seeing this morning is in Bitcoin 

Bitcoin - short term chart - looks like resistance @ - another even number target - 25k 



India 

At the G20, Biden joins forces with India and the Middle East, sidelining China npr.org

India Nifty - 20k (even) - I'd be a seller of that news 

That's all I got, 

AA 

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Monday, September 11, 2023

Market Update Sept. 11th, 2023

 Can you believe it's been 22 years since the Sept. 11th, incident, and

 authorities still have no explanation for the collapse of  WTC building 7, any more than they can explain how Covid 19 virus came into being? 

University Study Finds Fire Did Not Cause 3rd Tower's Collapse on 9/11 securitymagazine.com 

The truth is not that hard to find with a little digging, but most folks are happy to believe the official headlines. 

NIH admits US funded gain-of-function in Wuhan — despite Fauci’s denials nypost.com

"The powers that be", have every reason in the world to engage in several ongoing cover-ups, and anyone in academia who dares to question the official narrative, can be officially debunked, and defunded; so, don't expect the so-called experts to come forward, anytime soon.    

Despite the fact that corporate news agencies are paid to constantly lie, and engage in coverups, I still rely on the daily news to point out what investors are supposedly watching.     

Oracle earnings? 

As long as Oracle continues to trade in never never land ( at all time highs); I wouldn't touch it with a 10 foot pole.  

Morgan Stanley’s Wilson likes late-cycle defensive portfolio yahoo

Sure, Industrials have lagged, and they have room to run here, but I don't see energy as a "safe haven", since it's even more over-bought than tech. 

As I blogged on Friday, several energy names continue to break out to new all time highs, and you can add $PSX, and Marathon to the list...



The fake news also came out with some negative Germany news, and a Eurozone GDP downgrade  

EU Commission lowers Eurozone GDP forecast amid recession risks fxstreet.com 

 Funny, all this talk about "recession risks", when many European equities continue to trade near all time highs. 

Germany also looks fine, as it continues to consolidate sideways 

$DAX - see Friday's bullish hammer  


Oil seems to be holding its own, and could go a little higher  

But I wouldn't chase that either! 

I like financials here: 

Regional Banks - double bottom 



Good luck, 

AA 



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Friday, September 8, 2023

This $VIX REVELATION could change the stock market forever

 Money managers return to their desks next week, and many have already returned... and this explains the selling we've seen over the past 3 days. 

Monday will be the first Monday of the month, and money must be put to work, so what better time than right now to shake the weak hands!  

$VIX - actually closed in the red yesterday.   

Speaking of the $VIX, and continuing where I left off yesterday:  

The embedded video confirms what I've been saying about the $VIX - no longer working as an indicator of fear in the market - since around the beginning of 2022.  

This VIX REVELATION could change the stock market forever

Yes, changes to $SPX options, and the introduction of Daily Options have changed the market, but it's not only the $SPX being manipulated. 

Tech and big tech in particular have been hijacked by the sellers of volatility.

$VXN (The $NDX/ $VIX) - the proof is in the pudding, and seen on the chart below. 



We've seen the VIX manipulated since the Fed started experimenting with ways to decrease volatility, since Bernanke was in charge, but that was child's play compared to what 0DTE traders are doing. 

The only caveat for the short sellers is that the lower volatility, the smaller the daily moves. 

AA 

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Thursday, September 7, 2023

Groundhog Day Markets Continue But There's Something Different About This Market

Groundhog Day Markets Continue 

In other words; if you choose to trade the broader market, it's the same old, same old, every day, and it looks like bifurcated markets are here to stay. 

1. $VIX continues to be hammered in order to prevent program selling from being triggered, while the lame stream media continues to push, "soft landing", theory. 

2. The broader market remain mostly unchanged for the year. That may come as some surprise to followers of CNBC pump-monkeys, but the charts don't lie. 

Even Carter Worth chimed in on this - on Twitter - a couple days ago:
   

 $NYSE - remains about UNCH for the year 


3. We saw tech stocks pumped and dumped over the summer, along with other junk stocks, and sectors such as Airlines, and Casinos, not to mention China, and Home Builders.   

$ITB US Home Construction - breaks out to all time highs 

Is it any wonder investors have turned to chasing stealth rallies in individual sectors, and Spiders? 

Speaking of Spiders:   

The $XLE Energy Select Sector SPDR NYSE can be seen testing the all time highs 



$IVE/  $SPX value fund also trading at all time highs 


$SMH VanEck Vectors Semiconductor ETF - trading at all time highs 


Energy
 
4. Energy stocks continue to rally to new 1 year highs - namely marathon, BP Amoco, Exxon Mobil. and British petroleum, of course. 

Remember when I predicted that Exxon would continue to hold above the $100 level indefinitely, just so that the $100 call strike options would continue to pay for months on end? Well, here we are more than a year later....     

- this is nothing new. 
---------------------------------------------
But There's Something Different About This Market

What's different is the zero day to expiration daily options market, and how it's being used to sell (short) volatility, with impunity. 

Remember the warnings of a Volmageddon part II? Well, as it turns out, those predictions were misguided, and it just goes to show even JP Morgan can be consistently wrong, and the same could be said for Morgan Stanley's Mike Wilson, who was recently seen being trolled by Jim Cramer.  

This is beyond what I would call cocky, over-confidence; something Cramer himself warns against.

Getting back to the sideways market, and the lack of volatility


There is a good technical reason for all this sideways consolidation, and even though this is bound to play out for a good while longer, there will be better trading opportunities ahead. 

Following the big moves we saw in 2020 - when governments started over-stimulating, and printing money out of thin air, there needs to be a longer period of consolidation. 

So far, all we saw in 2022 was a gap fill target. 

$NYA New York Stock Exchange - Looks like continued sideways consolidation 

Of course I have downside targets, but I'm keeping those close to my chest.

This market is really no different than any other market, despite what some people think.  

After greed, comes fear, and capitulation, just like we saw when the covid story was used to drive the $VIX To 100, and there's an old saying... "never let a crisis go to waste". 

There will be plenty more engineered crisis, and I'm sure the next one is already in the works.  

It's just a matter of time, before the next market crash, and since the bulls think this is a new market, in which capitulation points are a thing of the past, the next one could be a real ball buster. 

 My suggestion is to get away from the $SPX/ #SPY, as I've been telling folks for nearly 2 years. 

Sector trading is where it's at, and probably not the endlessly rigged (higher) tech sector.  

There's always a trade somewhere 

The $VIX broke out slightly yesterday, before it was hammered back below the 50 day moving average. This felt more like a bear trap, or a test, than fear in the market.   

Next week is Options Expiration, and money managers are going to be forced to chase performance when they return from the summer break. That alone is enough to hold markets up a little longer.

Congress is already back from summer recess, and we know how they love to create trading opportunities.  

Perhaps we see the correction continue in Oct., but it's too soon to say. 

Take Care, 

AA 



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