Today, I'm seeing something in the banking sector charts, that looks eerily similar to what we saw just ahead of the crash of 2008, and I suppose that's why I'm up at 2-3AM - most days - analyzing the action in Europe! More on that in a minute.
$DJUSFN (Financials) Monthly Candlesticks - For those who missed the banking crisis of '08, this is the chart most of us used to track the financial collapse. The Dow Financials, or the $IYF (which is the corresponding ETF). Of course many traders like to use the $XLF, but I find it to be less accurate...
What I want to draw your attention to on the chart below is the similarity of what we saw in late '07, and what we just saw in March 2023. Very similar timelines, and big red candle taking out support.
Taking a closer look at how this take down was engineered
$BANK (Bank Index Nasdaq) - It looks like this collapse was planned for at least 10 months, and no doubt bearish Options were purchased during that time. This explains why the $VIX was mercilessly hammered - lower - during the same time frame. The lower the $VIX the; cheaper the Puts.
If this was all timed according to the options market, that means we probably aren't going to see much upside until after April OPEX.
It would be easy to figure out who coordinated this, just by looking at who was buying puts ahead of it, but don't hold your breath waiting for that investigation!
Of course there will be good trading in this sector at some point, because every good crash deserves a snap-back rally, but unless you traded in '08, you may be better off avoiding this trade altogether.
I'd also stay alert to other sectors wh
ich may follow....
Seems to me, money panicked out of financials, and investors rushed in to buy tech, oil, gold, and even bitcoin.
By the way, I recently raised my target on Bitcoin, just before we saw another higher high, on Thursday.
Despite all the negative headlines, stocks actually ended higher (for the week).
Friday's Action
We didn't get the short squeeze I was looking for, but I did get the direction right.
Market futures looked pretty dire at the time I made that prediction, but the market still managed to eek out a pretty nice gain - 50 handles on the $SPX - (off the lows of the session).
Off topic:
I follow space weather, because a CME has the potential to wipe out way more than just the stock market - and this week's Solar Storm put on quite a show!
Huge ‘doomsday’ blast from sun this week could have killed Earth’s internet www.kulr8.com
We should take this tweet seriously. It reveals a diffuse CME, not related to the contemporaneous M-class flare from AR 13256. This CME would not have been clearly identified in LASCO difference images with shorter delta t. The on-disk signatures (AIA) were also quite stealthy. https://t.co/VmGzgwe4ea
Strongest solar storm in nearly 6 years slams into Earth catching forecasters by surprisespace.com
I retweeted this CME alert on the 23rd, because I could see it was massive, and if I see another massive CME pop up on my radar, I may send out an alert in the news letter, because that could be a catastrophic event, as much as we rely on technology!
Speaking of Technology
Stocks actually ended up for the week, but I have to attribute that to 1st quarter window dressing. The best performing sector was tech, and of course China. Remember this is what led the rally - in Oct. - and tech out-performed in the 1st quarter.
Window Dressing
As we trade into the end of the First Quarter, any fund manager not fully invested in a leading sector, risks losing his, or her, job. We call this phenomenon, "being forced to chase performance". It's also called window dressing.
Side note: $AAPL Apple Here's something funny.
Just for kicks, I put a trend line on Apple, and tweeted it on Thursday
Then Yesterday Friday, I see Carter Worth on Fast Money, covering Apple.
If you happened to catch that, maybe you can tell me if he was bullish or bearish, because it just seemed wishy-washy as all get out. But I digress.
What Next?
If I'm correct, then we're about to see a run for the exits, as most brokerage houses have already closed their books on the Quarter. I call this phenomenon, "window dressing - going up in flames".
Financials and Banks
As I said earlier in the week, this market reminds me of '08, when financials led the crash, and I still follow financials closely, including all the major banks, and even several regional banks.
The financial crisis didn't end in '08.
The Zombie Banks are like the walking dead, and require regular injections (of money) in order to keep them alive.
Anyone who believes otherwise, just either doesn't have a good chart, or a good memory.
Many of these Regional Banks are skating on thin ice, but I think we've seen the worst for now.
The plunge protection team even came out in support of the banking sector after Friday's close.
Breaking News after the closing bell on Friday - FSOC (Financial Stability Oversight Council) aka the plunge protection team
Financials trade into a bullish inverted Head & Shoulders pattern
The $XLF didn't quite reach the (inverted) left shoulder target, so maybe we see another washout.
This is obviously a super high risk trade, but this is how I roll!
I don't like to rush into a trade like this, because the pattern is so obvious, to even the most unsophisticated investor, and no doubt many retail investors have already piled in.
Watch for a Monday morning surprise, to shake them out. This has become the new normal;
break key support, then back up the truck.
It's a crooked game.
Speaking of ill gotten gains; Goldman Sachs is a name to watch, since they seem to be doing pretty well in the current environment. I call them, "government Sachs", because so many former GS work in the Treasury. I'm not sure why anyone would give up a high paying job in finance, to go work for the government, but who am I to judge?!
I wonder what Goldman Sachs knows about the collapse of these "other banks" (wink wink) Deutsche Bank #Bullish Government Sachs $GSpic.twitter.com/TWiSfmouvN
I don't have as much time as I would like to compose a proper blog. I slept in, and have been having a relaxing morning. I also went back and touched up yesterday's blog, after finding a couple errors, and another key headline to add.
"All The World's A Stage, and all the men and women merely players;" Quoting Shakespeare
I'm sure you know by now, I enjoy exposing the crooked banking cartel (aka the money printers), the financial fake news, and the phony politicians, as much as I love timing markets.
I didn't watch to see what CNBC worldwide exchange was peddling this morning, but I did watch some Bloomberg:
Gloomberg is doing a great job fear mongering, this morning. Old dude is even predicting VIX 28.... #CreditSuisse#BankingCrisis
Then they brought on Dr. Doom, and in the introduction, they mentioned that the Prince of Financial Darkness - Nouriel Roubini - has ties to the Clinton administration! That's right, he's a government insider, and that might help explain how the Clinton's, and nearly every other higher up - even Berny Sanders - sees their net worth skyrocket.... The politicians and the banksters have been on the same team, for as long as I can remember. This is why I call our current government as "kleptocracy".
Checkout this brief video clip from earlier in the week, where the camera shakes incessantly, as if the world is coming to an end. Total psyop
Another thing I heard Tom Keene report is that nobody is going to want to go long, going into a "long weekend". I swear this is what I heard, but as far as I know this is only a 2 day weekend. Maybe this is just a figure of speech, meant to scare investors.
If you were watching my twitter feed, and know how to read the $VIX, you knew what to do...
Credit Suisse
As far as Credit Suisse goes... I got in and out of that trade, perfectly last time, and thinking about dumpster diving on this name, as I did half a dozen other trash stocks yesterday. Of course $CS could go to 0 (zero), but that's a chance I'm willing to take....
Revisiting Volmageddon 1.0 - Preparing for Vomageddon 2.0
Volmageddon; a blending of the wordsvolatilityandArmageddon, refers to the extraordinary U.S. stock market activity that took place on February 5, 2018.
On February 5, 2018 theCboe Volatility Index(VIX) increased from an opening value of 18.44 to 37.32 at close, after about a year of low stock market price volatility.[1]The stock market, along with price indexes tied to its performance, rallied strongly throughout January 2018 after having mostly risen for the previous few years. Market volatility as measured by the VIX had been mostly subdued. But in early February, market sentiment turned negative and the stock market sold off substantially on February 2, a Friday.[2]On Monday, the stock market continued its plunge and the VIX began to rise, more than doubling from open to close.
The tale of Volmageddon is really the story about what happened to the short-sellers of volatility on February 5, 2018
I remember the Volmageddon incident of 2018, very well, and after following the market closely - for most of my adult life - I recognize when the VIX is - once again - being routinely shorted, by the marrilly, complacent, manipulators. More about the setup for Volmageddon 2.0 in a moment.
My FXStreet Interview Dated April 10th, 2018
If you recall, before anyone had labelled the great $VIX short squeeze of 2018, "Volmageddon", it was a hot topic of conversation, in my first interview with Dale Pinkard, at the FXStreet.com
Sidebar:
Whether you're new to this (trading), or a seasoned veteran, I suggest you tune into Dale's show, and I promise you'll learn a thing or 2..! It's even FREE, and I receive no kick back for the recommendation. I tuned in recently, and I was reminded to think outside the box... (a story for another day), and we all need to be reminded sometimes!
This is the interview in which Dale, and I discuss the great $VIX short squeeze of 2018 - aka Volmageddon 1.0.
Cue The Video
I've cued up the Video (below) - to 11:30 -, so you can listen to my explanation for Volmageddon 2018, and view what I was seeing in the charts, for yourself.
The Segment is only a few minutes long: Be sure to see what happened to the $SVXY (leveraged $VIX bear (short) ETF) - because today, we're seeing the same situation develop again, in the same fund - the segment ends around 14:20 (after we both have a good laugh).
At the time of the interview I was under the impression that the SVXY was going to be retired, but I was probably only repeating some fake news, that I was hearing at the time.
In hindsight, nobody should be surprised that this fund still exist, since it's instrumental in helping the powers that be, drive the $VIX lower. Even the Fed bragged about lower volatility - with a wink and a nod - after they took control of the market in 2008. Think the Federal Reserve isn't in on it (selling volatility)? I'll leave that for you to decide!
Volmageddon 2.0?
$SVXY - this fund still exists, and continues to be used in order to help manipulate the $VIX, and I don't believe the criminal cartel -who controls Wall Street - is finished with their $VIX manipulation scheme. Not by a long shot!
As I alerted to on Friday....
I can tell you this; if the $VIX continues to break higher, the bulls are in trouble. #OPEX#Friday
And it was at that point the $VIX was driven lower - again no coincidence! No more a coincidence than the $VIX being shorted at the magic number - 20 - on Thursday.
Today's $SVXY
I have a target for the $VIX, but you won't find it on the above monthly $SVXY view - above
Sure the pink line is a stophunt, but even if that breaks, we aren't going to see the same kind of unwind we saw in 2018.
If we ever get to the point where we see Volmageddon 2.0, I'm sure it will catch most traders/investors off guard, just as the last one did.
Still Seeing A Lot Of Complacency In This Market
Friday - the idiots on CNBC Fast Money were seen once again throwing caution to the wind, talking about how the market doesn't want to sell off, while ignoring the fact that the only thing holding it up, may have been, February, Options, Expiration (OPEX)!
I'll keep sounding the alarm, especially after seeing the $VIX action of the past few days. It has been nothing short of a wild ride.
Recently I even went so far as to advise investors/ traders to "reduce your risk"...in my Feb 7th update, because something just doesn't smell right, and the market doesn't react normally.
I've been warning of a sharp correction, for some time now, and even more so as Wall Street becomes utterly complacent...
... yet this story continues to play out as it did even as the warning - of Volmageddon 2.0 - was sounded last week - by JPM - as I pointed out in Friday's blog -
Some folks are calling for the $VIX to hit 50, before May? I don't see that as even a remote possibility.
