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Saturday, November 4, 2023

Bullish Reversal Confirmed

In my most recent newsletter - dated Saturday Oct 28th - I stated that it was clear to me that we were getting "very close to a bullish reversal", and here we are - only 1 week later - coming off the biggest rally we've seen since July! 

A week ago Friday I blogged: "if the $VIX is taken down below 20, then this rally has legs"  

Judging by the way all the bears on CNBC Fast Money continue to badmouth stocks, we could see a massive short squeeze..."  

I even alerted to the Bear trap on the $VIX 

This was after watching the head clown on CNBC Fast Money brag about the $VIX levels. 

The truth is the $VIX could barely manage to hold the 20 level, after briefly testing 23 a couple weeks ago. Low 20's are not high $VIX levels, regardless of the bearish (false) narrative Fast Money traders try to spin. 

If the $VIX could manage to trade into the 30's, like it used to... then we would be seeing far more effective shakeouts, followed by far more explosive market reversals (to the upside). 

Does this rally have legs? 

Fast Money Traders think it does... and since they seem to be the best contrarian indicators I'm watching, I want to take the opposite side of that trade.  

There are several gaps that were left behind on the chart, and it's likely that we see those backfilled sooner, rather than later.  

$SPX - fastest rally since July. Trend remains bearish  

I think we would see the market go back and build a base, before rallying into Thanksgiving.

Fast money is also bullish Gold miners, so watch for that sector to follow gold lower. 


Good luck, AA 

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