Market Update - Money Is Put To work At The Beginning of the Month

 Money Is Put To work At The Beginning of the Month

There are exceptions to the rule, and you typically see money be put to work on the first Monday, of the month, but I would expect any smart money manager to be buying the dip today. 

Futures are green

 Remember what I said yesterday, about market reversals taking place in the heavily manipulated futures market? This morning is another prime example... and I saw this coming, when I shut down the computer, before yesterday's close. You just seldom see short covering rallies, going into the close anymore. Why not buy the news when Powell is finished speaking, rather than trap the short sellers with an upside surprise?  The only logical explanation is that money isn't put to work until the 1st trading day of the year.  

Of course, the fake financial news networks will never report, that "futures are up, because markets are cyclical, and money is being put to work...", but this is a fact, and true 90% of the time. Money is also typically put to work on Monday's, but it's more exciting to report how "bullish investors are", at the start of each week. 

Look, money is going to be put to work at certain times of the Day, Week, Month, and Year, regardless of market sentiment, and knowing this, and using it to your advantage, is one of the keys to constantly winning.  

Speaking of winning:

The charts all seemed to line up nicely yesterday, as the $SPX took out my target on the 10 min. chart, and the $VIX remained contained, in the face of what can only now be described as another taper tantrum. Didn't I tell you the latest covid story, had nothing to do with this pullback?   

The crooked banks, and their Hedgefunds, and the IMF, or whoever has been trashing the Oil market, knew the Fed was planning a faster tapper weeks ago. Of course Powell doesn't want to upset markets, by dropping a bombshell like that, so he talks about tapering for how many months now, and then basically admits the word transitory was a lie? How do you expect the market to react...? CNBC should apologize for claiming the market doesn't only care about free money, but instead they continue to blame the "unvaccinated". News flash: The vaccine doesn't even prevent covid, in fact it requires you get regular booster shots, just like the flue vaccine, that they've been seen pushing on every network for years! Follow the money.   

Breaking News: South African Heath Minister Says C.1.2 Variant "Not A Threat" Sept 3rd Reuters. Yet today we see more mass hysteria, with the reporting of 2 cases, over here or there, as if it's the black death.    

As far as the market is concerned: No covid worries today? How is this possible? 

It may be too soon to say we're off to the races here, and we could see the DOW test the 200 day ma, and the 50 week ma - as well - but I can say, I'm breathing a lot easier this morning. My stress level has come way down, and it seems very appropriate that "happy new month" is trending, on twitter, at #4.

A word on stress:  

It's important to take a deep breath, once in a while, because what good is winning, if you're going to let the stress get to you? Do some meditation, breathing exercises, yoga, sauna, whatever works for you! This is probably the best trading tip of the year! 

I'm still trying to get a handle on some sector charts, and I don't see $SOX leading a rally higher, although we do see the NASDAQ leading again this morning, and I did give the all clear, yesterday. I even covered my $SQQQ short, and sitting on a pile of cash. I think having some cash on the sidelines is a good idea, until we see more certainty.    

NASDAQ all clear sounded 

#NASDAQ chart updated. Giving the all clear on #Stocks #HappyHanukkah #HappyHolidays #TechnicalTuesday pic.twitter.com/ASpvvroPTo

— Veteran Market Timer (@3Xtraders) November 30, 2021

As usual I put up a lot of charts up yesterday, and even updated the public charts area. 

You'll find the $SVXY chart now in the #1 position, which continues to be used to manipulate $VIX futures. In fact most the leveraged ETF's are used to manipulate the underlying indices, and I've shown you how the machines will even buy moving averages on these funds, which makes the underlying market, a more difficult read than ever. It was never easy to read the market, or predict the next move, but today's market requires watching so many moving averages, it's mind boggling. And on top of that, there are too many funds (period!). This is one reason we find ourselves trading in a bubble, and Warren Buffet is correct when he refers to derivatives as "weapons of financial destruction", and a day of reckoning is coming. Come what may, I just hope to be on the right side of trading history. 

A 3rd problem with all these funds being traded, and the machines buying every moving average, is that it constantly slows momentum, in either direction. Some will argue that it provides more liquidity to markets, but it seems like one fund is often left fighting another. For example: If financial sector traders all traded the $IYF chart, you would get more consistent outcomes, than you do with another group of traders trading the $XLF, and still others trading the banking indexes. It's not wonder channels are constantly breaking, and targets overshooting, in both directions. 

So what next?   

 I suppose the first question traders will ask would be, "can the market trade to new highs"? And although I know it can... we're still trying to build a base, and it will probably be Dec. 17th (OPEX Friday), before stocks start looking toppy again. I try not to make long term predictions, because no matter how good you think you are, you're bound to be wrong. You really have to analyse this type of choppy market, day to day, BUT it's could take a little while for the market to get it's legs back, and there will probably be another pullback along the way. 

One day at a time. 

Follow the public charts, I'll be charting live at today's open. 

Take Care, AA 

 

Market Update 3/13/2020 - Friday The 13th - Charts FUBAR

I haven't had time to do and update, for a while, for obvious reasons. Global markets have been crashing for several weeks   several support levels were taken out over the past 2-3 weeks. This destroyed the upturned bullish channel we've been relying on for the past 12 years, and I continue to delete hundreds of broken charts. To make things even more difficult, I accidentally changed the timeline settings on more than 1 of my long term chart folders, and this left many charts FUBAR!

This morning we're seeing a sentiment change. It could be that the, "powers that be", figure they better dress the windows ahead of the end of the first quarter, to avoid massive redemption's in April, and what better time for a short squeeze than a week before options expiration. There's all the catalyst - for a rally - you need. Don't try to ague with yourself that markets can't rally, on bad news, they do this all the time.

Reminder: Money, and sentiment, moves markets, not bearish tweets. It's time to put the negativity out of your mind.

Now that everyone is bearish, and a massive number of retail investors/ traders are short this market, it's time for a short squeeze, that I think could easily carry us into July.

This is the fastest downside velocity - in a 3 week period - coming off an all time high, in market history. This isn't normal. It may have been planned for a very long time, and the pandemic is being used as an excuse to take down global markets, which were already weak, but for every over-reaction, is an equal and opposite reaction. 

The Economic collapse is being priced into US equities:  

The US the consumer was supposed to carry the economy. Well, now the consumer is cancelling everything, and wondering if they'll have a job next month, and one top of all that, Russia is trying to destroy the US Fracking industry, by continuing their so called "oil war". That story is old; but the coronavirus story was just one more reason for the market to over-react.

Oil:

See where this "Oil Price War", story originated: Moscow

Origin of the "#Oil price war" story, with a 29.50 target. https://t.co/ZyddWiXBRy

— Veteran Market Timer (@3Xtraders) March 9, 2020

In case you think I'm taking the coronavirus lightly: 

I predicted only a few months ago, that a black swan would emerge, which may cancel the elections, and lead to massive civil unrest.

See: Coronavirus much much worse than Ebola 




It's not that Ebola is that deadly, but it spreads rapidly, and that means that it will overload the healthcare system. 20% of infected people end up in the hospital, and there just aren't enough hospital beds.

As we've already seeing in China, and Italy, we will probably, see several large cities in the US, including my home town, Chicago, locked down. This will lead to a panic, and empty store shelves, as we've already seen some hoarding.

I refuse to fight crowds at the grocery store during a panic, and if need be, I can last several months, on what I already have. I've been preparing for this moment for a long time, but once the news cycle changes, and store shelves are replenished, I'd like to make some final preparations.

Imagine being locked in your house for several months, without work. are you well prepared?

Coronavirus is going to be with us for a while, but as long as markets remain open, and the volatility remains high it should offer some excellent trading opportunities.

$SPX

I'm seeing a megaphone pattern, with a 3100 target on the $SPX, by July. This a pattern 99% of technicians aren't familiar with. Most are still looking for a bullish channel, which is utterly ridiculous. 

Another possibility is a much bigger crash around the Summer break.

If these charts break, then I'll be back to square one.

I'll be updating the charts in the public charts area shortly, and because volatility is so high, only daily candlestick charts, or longer time-frame.

Follow my twitter page for real time market alerts, and watch me block the fools who dare pester me in the morning, talk up their own book, and otherwise troll me. I don't mind questions, but I'm not on twitter to hold new traders hands, and teach common sense. Read the Twitter warning in the chart legend (tab).   

Thanks for your support
AA

Trading the $VIX

This blog on trading the $VIX was most recently updated [9/17/2022]

Trading the $VIX

A better title for this blog may have been, "Guide to using the $VIX", because I don't recommend actually trading it, but rather using it as a guide, to help keep you stay on the right side of the trade. 

The $VIX is our #1 fear indicator. High $VIX = fear. Low $VIX = no fear (in the market). Pretty simple.

An oversold ($VIX) can be seen as complacency, and greed, which is bearish, and raises red flags to experienced traders, but usually a low $VIX only means that there's little fear in the market, and this is a good thing.

Exceptions: There are times when the market can continue to rally, despite a gentle rise in volatility (which is what the $VIX technically measures), but that's rare. 99% of the time, the $VIX is going to trade opposite the broader market.

A $VIX that breaks out above resistance, and continues to pop higher, always points to a risk off environment, and a rising $VIX should never be ignored. In fact it deserves a place in your tickers, and perhaps even a devoted chart view or 2, during times of high volatility. I personally have probably 100 $VIX charts, including leveraged ETF which trade with, or against the $VIX.    

Charting the $VIX take some practice, and I can honestly say, after many years, I am the foremost authority on reading the $VIX. Today, in 2022, you see every traders trying to do, what I started doing nearly a decade ago, and the experience shows.  

The $VIX is a sentiment indicator, and once it peaks out - in a market crash - it tends to reverse violently. Leveraged (VIX) ETFs, in a major sentiment reversal, may give back as much as 50% in a day!

Charting The $VIX 

 The best advice I can give you, on charting the $VIX, is to use trend lines, and watch certain universally accepted resistance levels like $VIX 20. A $VIX of 20 is considered high, and keeps investors on edge, and in a defensive mode. 

At the time of the most recent update to this guide (2022, the $VIX continues to trade above 20, nearly 2 years after the covid scare. This is unheard of!   

Without the $VIX it would be near impossible to determine market sentiment in real time, and if there's one thing I've learned over the past few years it's that what is important above all else is consistency, on a daily basis. 

The $VIX is technically a measure of market volatility, and volatility works both ways. At $VIX 10 the market hardly moves, while at $VIX 90 the market may swing 10%, or more, in only a few hours.

There are various ways to trade the $VIX, but I don't actually recommend trading the $VIX, and you can see what happened to traders, who were using the leveraged inverse fund to short the $VIX in early 2018, as the manipulators were wiped out in 1 day, as I explained in my live interview on F.A.C.E.






Sorry, I have to cut this article short, but I want to leave something for the book, I have planned.

Good luck, 

AA

Launch 3XTraders 2.0

Welcome back Traders,

It's time to dust-off this blog, and get y'all up to speed, and there's no better time than now!

There just hasn't been much to get excited about - marketwise - until now, but there are a couple more good reasons for my hiatus:

For those who don't know it, I used to have a private membership website, with a few loyal members, but it turned out to be more distraction than it was worth, and charging folks even a small fee to trade into a market bubble just wouldn't be right.

Closing the website was one of the best decisions I have ever made. because it has allowed me to hone my skills, with few distractions.

I also relocated a little over a year ago, and moving is disruptive, and it has taken some time to settle in and get adjusted. After I moved I attempted to re-launch this blog, but I found I was better off tweeting, and charting.

Twitter is the best place to exchange up to the minute information, and even blow off steam, when there's nothing better to do. If you don't have twitter; create an account, and follow my twitter [link] for the most up-to-date information. There are going to be times when we need to get more in-depth, and that's what this place is for. I'll direct you here, when I feel the need, and have the time, to blog, otherwise you can find me tracking the market in real time, on Twitter. Market forecasts often change in real time!

Feel free to ask questions here, rather than on Twitter, because distractions aren't helpful. There are times I look at opposing views, but usually it's only as a contrarian indicator. For that reason I seldom check twitter notifications during the trading day, and have been known to block people in the past. I understand, there are times, when it's hard separate your emotions from the trade, and I'm not always going to be right, but lots of opposing views are a distraction. 

In future blogs I plan to show you some of the most important market indicators, and techniques, I look at, to predict market movements, some of which - like the $VIX (our fear indicator) - you should be watching in real time, so you understand what I'm looking at, or why or I hold a certain market view.

More to follow,

Anthony Allyn