Saturday, December 19, 2020

What Typically Occurs Near Tops?

Statements like this appear a lot more- "SVXY: Short The VIX"- Could that be correct? Depending on your time-frame, perhaps that's one avenue but we would like to offer the caveat that if it isn't based on a reliable repeatable historical pattern, it may require extreme caution over anything more than a short term position.

We also see analysts calling signals out like 'cash on hand' and even connecting those to historical examples but the similarities are tentative at best. The point is though that as things like "Santa Rally" and complacency become the 'normal' bullish outlook, it may be correct but it may not be sustainable when viewed in a correct perspective. A distraction from reality is always a bad thing in trading and 'feelings' and 'good mood' is not how it all works. What is the market likely doing? Are we close to a trigger-point? How close?

We are fortunate enough to have many peaks in a four-year span. Let's take a look: see chart. 

Note- VXX volatility derivative has hit a measured tier 2 price extension which could cause a reaction up for volatility pretty soon. Tier 2 is not as great as a tier 1 move which we expect much later next year or in 2022 which is why the red target box is not at a new low in the SP-500. We are still looking at 3.740 or more in cash SP-500 for the short-term top.

See Critical Long-Term Review Here
The bots will flag here when they see a top. (1/25/202/20/204/9/20)
This Information Is For Entertainment Purposes Only. Financial Loss Can Occur From Investing.
Our favorite go to site- McVerry Report


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