I know i said i was looking for a wash out but that was just malicious.
And i'm just going to get this out of the way now. Generally i'm not someone to take a victory lap but damn it feels good to be right haha. Especially when you're invested in something that hasn't been confirmed yet.
I'm still trying to pick my jaw up off the floor from what we just witnessed. Welcome to the rug pull, sometimes better known as the thunderdome. Today we saw legitmate panic and fear selling. What happens when we consistently drill lower like that throughout the day is MM's sell you puts right? They are short that put. MM's are not allowed to (generally) make a profit off the stocks, puts, or calls they sell and buy. That's why they're called market makers. When you have an 80 point S&P gap down what happens? Everyone and their mother starts buying puts. And since the MM's are now short the puts they just sold you they have to hedge those short puts with short shares. This is what constitutes the constant drill we just witnessed. There were No buyers, at all today. This was a classic rug pull. Anyone who averaged down Tuesday on "the dip" and again yesterday is now so far underwater they're ordering scuba gear off Amazon if they can afford it.
I think a lot of the selling we did see today was also panic selling by exactly who this type of situation is aimed at. The dentist who was sitting on their couch thinking their super smart because he bought some AAPL a couple weeks ago. Or the 20 yr old putting their student loan into Robinhood and buying weekly calls on a stock no one has ever heard of. Or best yet, the ex CEO of a gambling website who calls daytrading the "easiest game ever." This is what happens. This is why i always say keep your head on a swivel.
Remember what i said about poor market structure and profile? This is exactly what happened in March.
I generally am humble i swear but i called it:
"Here's how it'll happen, just like it does every time: New traders most likely bought the top yesterday after being trained to buy at the close every day, and ride overnight. They've also been trained to buy every dip, because it works ("easiest game i've ever played"). Most probably bought the dip today. Why wouldn't you? IF we continue to decline, let's say we have another 1% or greater down day tomorrow they'll average down. Why wouldn't they? It's worked every time before. Until the next day we have an even deeper sell off. They start panicking - they average down even more if they have any more money. This is wash rinse and repeat until these new traders sell their calls or stocks for a deep loss, and only then will we bottom. Once we shake out and capitulate the ones who were on easy mode that's when we'll reverse. This happens on a micro scale in individual stocks all the time. But since we're SO bullish in the entire market that's when they'll drop the hammer ."
Now the question is how many panic sold their calls or stocks and bought puts?
This is where it gets tricky. We just had a MASSIVE sell off. I wasn't expecting anywhere near the amount of selling we just saw. down 1800 points on the DOW, we were down almost 200 in the S&P at one point. We almost hit the circuit breakers during the cash session. That's insane. But you can just chalk this up to the bizarro world this market is in right now. So where do we go from here?
I was expecting a move down into $300/$3000 but not all in one shot. So that clouds my next moves. I usually would expect a bounce because "it has to, right?" when you have a move like that. Wrong. I got liquidated in March with that same thinking. "There's no way we keep selling after this -150 point day". Boy was i wrong.
Now is this the same? It sure felt like it. But i don't know how much water weight that will hold. I honestly still feel like this was a washout, but with the addition of.. i don't know, the panic? In the market today it might have just got out of control.
Tomorrow will be telling. We need the market to give us direction. There's two possible outcomes.
The market did fight for $300/$3000. We could bounce tomorrow. How high? Who knows. Possibly to the $305/$306 level, and if they're feeling really cheeky all the way back to today's open at around $310.
$294 will be the last line in the sand for the bulls. If they give it up it's back down towards $280. If that breaks, $250. If that breaks we revisit the lows from March at $225. The good news for the bulls is there should be a decent semblance of support between the $294, and $280 levels as this is where we consolidated (good market structure) before we moved higher. Tonight the move we just had will reverberate through the Asian markets, and possibly even into the EU markets again tomorrow. If we gap below $300 tomorrow morning short at will. If we hold $300 or are buoyed tomorrow for whatever keep a neutral stance. This could still head either way with the bulls protecting the $300/$3000 level. The next 12 hours will tell.
By the way, speaking of. Notice how they tried to pump the Moderna vaccine news this morning when they saw how far we were down? It's a joke.
Scoreboard:
SPY/SPX: -5.74%
IWM: -7.55%
VIX: + 47.95%
NDX: -5%
DJI: -6.9%
No bounce. Knifed through 4 of my price levels
A collection of F you candles. Notice we found relative support on the intraday 200 period MA
Pretty sure we can call that a reversal. Gapped BELOW the channel trend line this morning
Drill baby drill
In this situation you could go chasing waterfalls
Trend broken. All the way to the .5 fib in one day
We ended directly on my target for IWM as well. Still within trend though. Note that
Self explanatory.
Blowin off a top? Maybe. Target could be the prior breakout area of 9300
Oof. Target is top of channel at 24,500
XLF - Dead on arrival at a -8% day
DJT? -7.72%
Here's where it gets weird. Metals
For some reason the chart is showing a tail candle at yesterdays close, but that is not corroborated by the intra day charts. And we were NEGATIVE on the day. This is how you know we were fear selling.
But.. (intrday chart)
Same with Gold, which tested the top of it's channel and get rejected.
Intraday
Bonds back to your regularly scheduled programming. IF we break above this range shit is hitting the fan. Act accordingly
If you were positioned for this congrats, if you were delta neutral congrats. What i'd suggest is taking a neutral stance at this point. If you can maybe strangles or straddles. VIX isn't making entries unaffordable just yet. I'm personally at -10 delta after repositioning at the end of the day.
If you're new and on the receiving end of this don't panic. Don't let emotion come into the fray. The second you do that is the second you make unaffordable decisions. A day like today is NOT natural nor normal. Think through it. Try and and work your way out of it by hedging somehow. If you have questions feel free to ask.
Bogey's on the downside: $294.
Bogey's on the upside: Today's open @$312.
I'm going to go enjoy myself a delicious beverage and try and decompress. You should too.
This is not trading advice. This is my own personal opinion based on my own personal TA.
And i'm just going to get this out of the way now. Generally i'm not someone to take a victory lap but damn it feels good to be right haha. Especially when you're invested in something that hasn't been confirmed yet.
I'm still trying to pick my jaw up off the floor from what we just witnessed. Welcome to the rug pull, sometimes better known as the thunderdome. Today we saw legitmate panic and fear selling. What happens when we consistently drill lower like that throughout the day is MM's sell you puts right? They are short that put. MM's are not allowed to (generally) make a profit off the stocks, puts, or calls they sell and buy. That's why they're called market makers. When you have an 80 point S&P gap down what happens? Everyone and their mother starts buying puts. And since the MM's are now short the puts they just sold you they have to hedge those short puts with short shares. This is what constitutes the constant drill we just witnessed. There were No buyers, at all today. This was a classic rug pull. Anyone who averaged down Tuesday on "the dip" and again yesterday is now so far underwater they're ordering scuba gear off Amazon if they can afford it.
I think a lot of the selling we did see today was also panic selling by exactly who this type of situation is aimed at. The dentist who was sitting on their couch thinking their super smart because he bought some AAPL a couple weeks ago. Or the 20 yr old putting their student loan into Robinhood and buying weekly calls on a stock no one has ever heard of. Or best yet, the ex CEO of a gambling website who calls daytrading the "easiest game ever." This is what happens. This is why i always say keep your head on a swivel.
Remember what i said about poor market structure and profile? This is exactly what happened in March.
I generally am humble i swear but i called it:
"Here's how it'll happen, just like it does every time: New traders most likely bought the top yesterday after being trained to buy at the close every day, and ride overnight. They've also been trained to buy every dip, because it works ("easiest game i've ever played"). Most probably bought the dip today. Why wouldn't you? IF we continue to decline, let's say we have another 1% or greater down day tomorrow they'll average down. Why wouldn't they? It's worked every time before. Until the next day we have an even deeper sell off. They start panicking - they average down even more if they have any more money. This is wash rinse and repeat until these new traders sell their calls or stocks for a deep loss, and only then will we bottom. Once we shake out and capitulate the ones who were on easy mode that's when we'll reverse. This happens on a micro scale in individual stocks all the time. But since we're SO bullish in the entire market that's when they'll drop the hammer ."
Now the question is how many panic sold their calls or stocks and bought puts?
This is where it gets tricky. We just had a MASSIVE sell off. I wasn't expecting anywhere near the amount of selling we just saw. down 1800 points on the DOW, we were down almost 200 in the S&P at one point. We almost hit the circuit breakers during the cash session. That's insane. But you can just chalk this up to the bizarro world this market is in right now. So where do we go from here?
I was expecting a move down into $300/$3000 but not all in one shot. So that clouds my next moves. I usually would expect a bounce because "it has to, right?" when you have a move like that. Wrong. I got liquidated in March with that same thinking. "There's no way we keep selling after this -150 point day". Boy was i wrong.
Now is this the same? It sure felt like it. But i don't know how much water weight that will hold. I honestly still feel like this was a washout, but with the addition of.. i don't know, the panic? In the market today it might have just got out of control.
Tomorrow will be telling. We need the market to give us direction. There's two possible outcomes.
The market did fight for $300/$3000. We could bounce tomorrow. How high? Who knows. Possibly to the $305/$306 level, and if they're feeling really cheeky all the way back to today's open at around $310.
$294 will be the last line in the sand for the bulls. If they give it up it's back down towards $280. If that breaks, $250. If that breaks we revisit the lows from March at $225. The good news for the bulls is there should be a decent semblance of support between the $294, and $280 levels as this is where we consolidated (good market structure) before we moved higher. Tonight the move we just had will reverberate through the Asian markets, and possibly even into the EU markets again tomorrow. If we gap below $300 tomorrow morning short at will. If we hold $300 or are buoyed tomorrow for whatever keep a neutral stance. This could still head either way with the bulls protecting the $300/$3000 level. The next 12 hours will tell.
By the way, speaking of. Notice how they tried to pump the Moderna vaccine news this morning when they saw how far we were down? It's a joke.
Scoreboard:
SPY/SPX: -5.74%
IWM: -7.55%
VIX: + 47.95%
NDX: -5%
DJI: -6.9%
No bounce. Knifed through 4 of my price levels
A collection of F you candles. Notice we found relative support on the intraday 200 period MA
Pretty sure we can call that a reversal. Gapped BELOW the channel trend line this morning
Drill baby drill
In this situation you could go chasing waterfalls
Trend broken. All the way to the .5 fib in one day
We ended directly on my target for IWM as well. Still within trend though. Note that
Self explanatory.
Blowin off a top? Maybe. Target could be the prior breakout area of 9300
Oof. Target is top of channel at 24,500
XLF - Dead on arrival at a -8% day
DJT? -7.72%
Here's where it gets weird. Metals
For some reason the chart is showing a tail candle at yesterdays close, but that is not corroborated by the intra day charts. And we were NEGATIVE on the day. This is how you know we were fear selling.
But.. (intrday chart)
Same with Gold, which tested the top of it's channel and get rejected.
Intraday
Bonds back to your regularly scheduled programming. IF we break above this range shit is hitting the fan. Act accordingly
If you were positioned for this congrats, if you were delta neutral congrats. What i'd suggest is taking a neutral stance at this point. If you can maybe strangles or straddles. VIX isn't making entries unaffordable just yet. I'm personally at -10 delta after repositioning at the end of the day.
If you're new and on the receiving end of this don't panic. Don't let emotion come into the fray. The second you do that is the second you make unaffordable decisions. A day like today is NOT natural nor normal. Think through it. Try and and work your way out of it by hedging somehow. If you have questions feel free to ask.
Bogey's on the downside: $294.
Bogey's on the upside: Today's open @$312.
I'm going to go enjoy myself a delicious beverage and try and decompress. You should too.
This is not trading advice. This is my own personal opinion based on my own personal TA.
Комментарий:
People out there buying the dip...
The .5 fib is at $311.. right where we opened yesterday. Keep that in mind.
Also. I won't be posting an update after close today as i'm heading the to the airport this afternoon to go out of town. Have a good day and happy trading!
The .5 fib is at $311.. right where we opened yesterday. Keep that in mind.
Also. I won't be posting an update after close today as i'm heading the to the airport this afternoon to go out of town. Have a good day and happy trading!
If we open right at $305 the first 15m candle will be key