EOD: VXX hit 26.66 cash target- [possible short-term support?]. ES hit 4443.25 zone early and at the close - [potential short-term resistance?]. Breadth printed a bullish histogram bar- the third longest up since 8/3/21- looks like it's trending up to a lower overall peak on the daily [expected]. VIX has not filled it's gap from 7/6/21 but is right up against it at 15.87. VIX is still above it's low from 6/29/21. It could retest that area [14.00 zone].
3:36pm EST: VXX possibly had a longer target in mind at 26.67 zone which is a straight shot fib extension ['long' x 2.6] from a vector that commenced on 8/3 - [p/b 8/4]. Let's see if that provides a temporary support.
11:24am EST: VXX hit a [long x fib 2.6] target at 27.07 [27.08 zone plotted on updated chart] and is bouncing from there. This likely will form the first of two more vectors pointing to a final VXX target. If a turn signal prints prior to that completing- VXX is likely essentially done. Otherwise the turn signal watch remains active.
10:30am EST: VIX has a lower gap at 15.15 - 15.70 zone so that may be a target but it still remains above the weekly bottom that was flagged on 7/9/21 at 14.03. Likely more time and lower VXX prices will be added for this to fill. Meanwhile ES could go anywhere higher. It isn't required for the VIX gap to be filled but it is likely.
Original post-
Often round number targets are the attractant but the market tipping points do not care. If a gas tank holds 9.8 gallons, it won't matter that you were counting on a 10 gallon fill-up before setting off on a journey. A market tipping point is established by numerous hidden participating variables that eventually strike a limiting function. When that place gets hit it's a 'temporary' bye-bye time because even though it's always a bullish market, corrections at some degree are required.
ES4500 could just as easily show up as not. It does not matter. The only thing that matters is the size and location of a significant turn signal that likely represents a higher degree than 'normal' [and that is whatever your trading strategy permits - are you holding for decades or years/months?]. Every participant has a time-frame/strategy.
The market flagged a weekly turn signal on 7/9/21 where volatility struck a low target which signal only happens infrequently at this degree. See prior post.
The chart at bottom is a reprint from 8/6/21 and since then breadth is indeed 'advancing' in small up/down increments getting ever smaller [histogram bars are shrinking] -that action is a heads-up moment at this juncture especially if it continues as expected. When that last strike hits, the market position may continue higher or not. The die is likely cast for a correction to follow. The market acts like it is not in a selling mood so a collapse in bids may be the precursor to a selling event that escalates. That is often a dramatic move. When that happens, expect headlines like 'Virus Crashes Market', 'Inflation Fears Crash Market' etc. - all made up tea-leaf readings. Pick one. Any will do- they all work to 'explain' a drop except the real reason. The market buying ran out of buyers at this price point.
Selling at regular intervals keeps the market buoyant. Charts are showing a stretched situation and this next one has the potential to be a doozy. A daily turn signal 'watch' is now active. There could be one more small vector to print in the volatility derivative VXX after a very short-term pullback in market prices. That target has the potential to be all that she wrote for now.
Comment: Many market blogs singing the 'record highs' hymn is normal behavior and is indicative of a celebratory sentiment that often reflects exuberant 'hope' that can accelerate late in the game. In fact we pretty much count on it otherwise we would be inclined to triple-check the current analysis for anything we missed. Descriptors like 'surge' are a give-away for these less-than-impressive price advances overall even though some indexes fall behind and the 'surge' is in playing catch up- it's a buyer's rotation into 'dipped prices' [on sale] indexes. Most likely not much more than that but still potential short-term price gains that are intrinsic in the market as a whole at this point as more and more indexes finally hit the 'full' reading on their fuel gauges. Could it continue for days/weeks/months? - sure if the analysis here is way off, that will soon be apparent.
Ref- [both weekly 200ma charts are relatively unchanged]:
Precipitous drop setting up a bear flag?
ARMS index set up
See Critical Long-Term UPDATED 4/12/2021 Review Here
The bots will flag here when they see a top. (1/25/20, 2/20/20, 4/9/20)
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