$VIX DOES SOMETHING IT HASN'T DONE SINCE 2015!

 Since CNBC likes to report a lot of fake stats (as I pointed out in yesterday's blog); I thought I'd reveal a real historic move we're seeing on the $VIX.

What is the $VIX? The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market Source CBOE.com 

The $VIX predicts future volatility, by monitoring the options market, but more and more the $VIX is continually beaten down on a daily, weekly, and monthly basis, in order to ensure that the bullish Options pay. Of course when the market is made up of 90% bulls, it's quite easy to overpower the bears, and especially during periods of light volume, as we've seen again this summer. 

Does this mean the $VIX is broken? In a way it does... but I prefer to call the $VIX rigged, in that it's continually broken, on purpose, yet it is also allowed to occasionally run; in order to cause panic selling, and reset the options market. 

For Example: Think back to the Trump crash (AKA the Covid Crash). The $VIX was allowed to run for exactly 1 month - from the end of  February OPEX, until March OPEX (precisely). Also notice the setup - seen on the chart below - for the previous 3 years. 

I'm convinced the whole crisis was staged in order to help get rid of Boris Johnson, and Donald Trump, just as 9/11 was used for nefarious purposes.

 See: Unusual Options Market Activity and the Terrorist Attacks of September 11, 2001. introduction jstor.org 

Jon Najarian is mentioned in the above article, as a someone who concluded - from the trading activity - that someone knew that 9/11 was going to occur.  

I wasn't actively trading during the time of 9/11, but it's a fascinating study!  

$VIX DOES SOMETHING IT HASN'T DONE SINCE 2011! 

$VIX - Monthly Candlestick Chart - 16 year view - The $VIX continues to trade below the 48 level for the longest run since 2015. 

Yesterday, I incorrectly stated on twitter that the $VIX had stayed below 50, for the same length of time, but on closer inspection, 48 was the actual pivot in 2011.

If you look at even longer historical $VIX charts 45 was the magic number, but it seems that over the more recent past higher levels of volatility have become the norm. We're also seeing a crisis that requires larger amounts of liquidity to reflate the bubble, and we seem to be overdue for one. 

No doubt the $VIX will once again be allowed to break above the 48 level, but if history is a guide, it may not be until early next year, in 2024. 

Market Update: 

Turns out the long awaited $NDX rebalance was much to do about nothing! 

Why the Nasdaq 100 $NDX rebalancing was a nothingburger.https://t.co/NJMrlEbPKj

— Veteran Market Timer (@3Xtraders) July 25, 2023

 

This morning we see money flow back into the tech sector. I saw this coming a mile away. 

$SPX market futures look weak#DowJones also looks toppy
Watch for a rotation back into the Nasdaq.

— Veteran Market Timer (@3Xtraders) July 25, 2023 

  

Take care, 

AA 

Everything that's wrong with this Market

 Be sure to catch yesterday's 2 (count 'em) 2 market updates; the second of which included updated Dow, and $SPY charts.    

Everything that's wrong with this rigged Stock Market

I could easily do a top 10 things that are wrong with this market, but let's try to keep it to 5....  

1. Cryptocurrency - The ridiculous crypto currency market is a perfect example of everything that's wrong with this market, and proves that valuation is not an indication of real value. Crypto is worth whatever someone is willing to pay for it, and estimates range from 0, to $1 million, depending on who you talk to. Crypto has become just one more sector to pump and dump. 

Speaking of Crypto

I recently called Bitcoin a sell, as it continued to retest the top of the range it's been trading in for the past several months, and today we see it trading back near the bottom of the range. 

Most everything - except tech & trash -seems to be trading in a similar pattern - a topic for another day  

2. Foreign Investors 

I think allowing foreign investors to drive US equities is a recipe for disaster. 

Do we really want to rely on the Saudis and China for future earnings growth? This seems to be a conflict of interest, when national security runs counter to investment strategy. 

When Global Markets collapse you're going to see forced selling of US assets, and the Fed has been forced to bailout foreign entities, more than once. 

3. Corrupt Financial Institutions Run The Table

Just Yesterday: Deutsche Bank Draws Fresh ECB Scrutiny Over FX Sales

How many times have the banks been caught red handed... and all they receive is a slap on the wrist? 

Of course the powers that be go easy on the banksters, because they have campaigns to finance. Politicians know where their bread and butter comes from. 

Related 

Hillary Clinton Struggles to Explain $600K in Goldman Sachs Speaking Fees (many sources) 

4. Upgrades, Downgrades, and Rumor, all being reported in real time. 

You can also add to that the endless media hype, and Earnings, reported in after hours trading. Whose brilliant idea was this? I suspect whoever likes driving stocks in 10% increments, on light volume, is behind it, and the AI which makes Options trades in milliseconds. 

5. Insider Trading by Government Insiders Continues 

78 members of Congress caught violating law on stock trades businessinsider.com 

Fed Restrictions on Employee Stock Trading Not Strict Enough, Says Watchdog WSJ 

In short, the whole system is corrupt, including the corporate owned lame stream media that covers it.

Market Update: 

I don't like energy here, and I tweeted that yesterday.  

Goldman Sachs just reported lackluster earnings, but we're not going to see any panic selling, until the appropriate time. I can't say when that's going to be, but take a look at what just happened to bitcoin. The short sellers were shaken out above the 31k level, before it was dumped. 

I would either sell into strength, or just wait until you see panic return to the market. 

In the meantime: Watching the Dow 35k level

Take Care, AA

  

Further Exposing The Hopelessly Rigged Stock Market

Welcome back from vacation. Today is basically the first normal day of trading since June 30th, so I would expect money to be put to work, and a possible rebalancing, ahead of the next earnings season. More on that in a minute.     

In Friday's update, I touched on some of the components that are being used to rig the market higher; one of which being the newly created leveraged bull ETF ($UBOT), but the AI story is only the tip of the proverbial iceberg, when it comes to the rigged tech market. 

 In fact nearly all the high flying market drivers of the NASDAQ - Namely - Tesla, Microsoft, Google, Amazon, and of course Apple, have all been duplicated, using leveraged Bull ETFs.  

$AAPD Direxion Daily AAPL Bear 1X Shares Common shares of Apple Inc. (AAPL) -100%

$AAPU Direxion Daily AAPL Bull 1.5X Shares Common shares of Apple Inc. (AAPL) 150%.

$AMZD Direxion Daily AMZN Bear 1X Shares Common shares of Amazon.com, Inc. (AMZN) -100%

$AMZU Direxion Daily AMZN Bull 1.5X Shares Common shares of Amazon.com, Inc. (AMZN) 150%

$GGLS Direxion Daily GOOGL Bear 1X Shares Class A shares of Alphabet Inc. (GOOGL) -100%

$GGLL Direxion Daily GOOGL Bull 1.5X Shares Class A shares of Alphabet Inc. (GOOGL) 150%

$MSFD Direxion Daily MSFT Bear 1X Shares Common shares of Microsoft Corporation (MSFT) -100%

$MSFU Direxion Daily MSFT Bull 1.5X Shares Common shares of Microsoft Corporation (MSFT) 150%

$TSLS Direxion Daily TSLA Bear 1X Shares Common shares of Tesla, Inc.

 TSLA -100% $TSLL Direxion Daily TSLA Bull 1.5X Shares Common shares of Tesla, Inc. (TSLA) 150% 

When were most of the above funds created? Just in time for the longest tech rally - since I don't know when - of course; right around Oct, 2022. 

There are no coincidences on Wall Street! 

I haven't taken the time to chart all of the above leveraged funds, but I plan to start with the ones with the highest market caps, since that's where the most excitement is being generated. 

The AI boom has boosted the 'Magnificent 7' stocks' combined market cap to $11 trillion - that's nearly triple Germany's GDP. businessinsider 

For example  

$GGLS - the leveraged Google bear fund continues to be hammered... 

That's just one of the ways the powers that be continue to rig the market higher, is by hammering the leveraged bear funds. 

I'm not sure if it's too late to get in on the latest pump job, but by the looks of Friday's action, this tech rally still seems to have some room to run. 

Some would say, "don't chase the herd", but that's exactly the wrong advice until you see a reversal, and we have yet to see panic selling out of tech stocks. 

There are trades to be had in the AI space, just keep in mind that this rally has already run for several months, and a correction is way overdue. 

The other rigged market - the Options market 

$VIX - the VIX used to be a good indicator of fear, and greed, but today it's used as a bear trap. Take for instance the past 2 rallies on the $VIX; First back in May, and the latest run to $VIX 17 in July. 

Best seen on the 60 min. chart view 

The $VIX was simply pumped above resistance in order to set a series of bear traps. 

Friday, the $VIX was sold at the 50 day moving average, and not even a late day reversal could lift the $VIX into the green. 

I used to look at a low $VIX as the market being complacent, but there's no fear in a rigged market.  

China, Energy, commodities, including - but not limited to - Natural Gas, and Oil.  

Did you happen to notice the massive run in energy on Friday? It was hardly even covered... Instead, the lame stream media spent most the day pointing at Janet Yellen's mysterious trip to China, and Alibaba (up 8%).   

WATCH: Biden Treasury Secretary Janet Yellen completely embarrasses the United States as she bows multiple times to the Chinese Economy Czar and calls him the wrong name.

During her meeting to heal relations with China, Yellen bowed multiple times as Vice Premier He Lifeng… pic.twitter.com/Zjz1ejOpcH

— 🇺🇸Travis🇺🇸 (@Travis_in_Flint) July 8, 2023

A topic for another day. 

Yes, China was up 2%, but so were the regional banks, and Energy.  

 This game of whac-a-mole seems to be the new safety trade, rather than the rigged $VIX, and like Jim Cramer always says, "there's always a bull market somewhere" . 

$UNG - Natural Gas rallied back above the 50 day moving average, a couple weeks ago, and back-tested that support level on Friday. 

 OIL $USO - broke out ending up 2%, and oil producers were up twice that. 

COCOA - This rally has also continued since Oct.  

There's always a bull market somewhere, and especially when there's so much excess liquidity in the market.

Market bubbles aren't created in a day, and it could take several more years before this one is deflated. 

Of course the latest rush back into the sectors I just mentioned, may also be part of a rebalancing  ahead of earnings, and the second half of the trading year. 

The powers that be seem to have perfected market manipulation, and AI is sure to carry that forward. 

It's hard to even imagine the market pulling back as it has historically done, for centuries.  

Manipulation is here to stay.  

On a happier note, the climate engineers took a break from their aerial assault on Sunday, and it was refreshing to see normal clouds, on a blue sky, on a sunny day, for the second time in a week. The first time was on the 4th of July, when military pilots were apparently given the day off.   

Here's what it looked like a day earlier! 

#Geoengineering watch Chicago. Injecting aerosol particulates into the air that we all breath. @RealGeoEngWatch pic.twitter.com/BRCjbh4G7V

— Veteran Market Timer (@3Xtraders) July 3, 2023

Take Care, AA 

Incredible market insight into the AI trade + exposing Inverse Cramer scammers

Continuing with the same topic we've been covering over the past few days: the so called AI/tech/chip boom; which has really been the only exciting thing driving animal spirits over the past several months, although  it's also beginning to look a lot like the annual "dash for trash" - in heavily shorted names. 

I can prove that all day long: 

How about shake shack; is that an AI stock? 🤣 $SHAK pic.twitter.com/xhdWPDugrQ

— Veteran Market Timer (@3Xtraders) May 31, 2023

 

Getting back to something I mentioned in the first update in this series: The options market.  

I like to think of the Options market as an underlying sub-market that more and more explains the real time market action we see every day. This market is where the hidden hand operates. This is where the big fish are lurking, and once you understand that, then you'll have an easier time understanding why the market moves according to certain timelines.

Think back to the market action of the past several months. Pretty dull right? Basically trading in a sideways range, and shaking out the weak hands on both sides of the trade. 

Well, while most traders have been waiting for the broader market to resolve itself, the smart money has been driving a sub market, and this time it was the tech sector. 

Before the tech sector; it was the casinos,the home builders, and even Silver...  and why is that? It's because these are thinly traded markets, and thinly traded markets are easily manipulated. 

Notice how you no longer hear about the home builders? There's a reason for that, and it's called, "sector rotation", and what I often refer to as, "whack-a-mole markets". 

When Jim Cramer says, "there's always a bull market somewhere", he isn't necessarily referring to the options market, but he recognizes that there are engineered stealth market rallies within the broader market, if you only know where to look, or personally know who is engineering it. 

Inverse Cramer 

I'm sure you've all seen the inverse Cramer accounts, which constantly pit the retail investor against whatever trade Cramer happens to be pushing. 

Yes Cramer is often wrong, and very wrong, and he's targeted, because retail money is going wherever he points, and that makes him a handy target of the hedge funds, but....   

These inverse Cramer accounts are obviously fake, and used to set up the retail investor for the fall, and all you have to do is a twitter search for "inverse cramer" to find 100's of trolls/bots pushing those accounts to the top (visibility). Just yesterday, I blocked like 20 of these fake accounts, and this isn't the first time I've discredited these scam artists. 

Cramer doesn't trade the $SPX. He drives big tech. You've been dupedhttps://t.co/DZJX6F4mWB

— Veteran Market Timer (@3Xtraders) May 18, 2023

Who do you think got squeezed in this tech rally? Retail investors, of course!   

Luckily this time I saw this rally in tech continuing into last week's Memorial Day holiday, and I didn't find myself on the wrong side of that trade, but I can assure you that many retail short sellers are utterly wiped out. 

To give you some idea: I finished covering my positions in $SOXS (the leveraged $SOX bear ETF) on 5/24, just ahead of what can only be described as a historic $NVDA earnings release.  

It was the perfect swing trade! 

Getting back to the topic at hand - the Options Market 

In the first update in this series; I specifically mentioned the Najarian bros.; not because I think they're rigging markets, or doing anything else illegal, but because I know Jon Najarian has his hand on the pulse of the Options market. 

I found this interview from 3 months ago, and he offers some really intelligent perspective, and insight, on 0 days to expiration Options, as well as the recent $VIX action, and why that doesn't seem to work like it used to... 

Must Watch! He doesn't try to sell you anything, and I can assure you, I get nothing out of this. 

 I think I have a newfound respect for Jon Najarian, and a new way of looking at the market. Followed 

This tweet explains a lot: 

$NVDA SHORT SELLERS DOWN $4.1B IN MARK-TO-MARKET LOSSES SINCE MAY 24

— Market Rebellion (@MarketRebels) May 30, 2023

Massive short capitulation, as I've been saying. 

Fast Money's Take

Fast money thinks the retail investor was not buying NVIDIA... They seem to think that retail investors only have enough money to buy (meme) penny stocks, as usual they are completely out of touch. 

If I saw this trade coming from a mile away, and even alerted to it, then many retail investors were on board.   

Trading really is analogous to a game of poker, and the trick is to not be the sucker who is left holding the bag, and if you don't know who the sucker is, then that may be you! 

As far as the trade is concerned. 

I continue to see money flow from one chip stock to the next. 

For instance yesterday $AI was dumped, while Intel was bought, and this game of cat and mouse could easily continue into weekly Options Expiration.  

Take care, 

AA