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Lets start off with the VIX.
We can see above a few things:
VIX is threatening new lows
The VIX chart is no longer trending upwards
We failed to make new highs in VIX but new lows in SPX.
Let's think above the three above. Typically, cheaper vol gets cheaper. I know that I was wrong in June thinking that "this was it, the lows are in". I find it hard to believe that we will see new lows in SPX again given that this is the exact same setup from an "overbought" SPX perspective.
Now, I do think that we are due for a quick little undercut below the 3900 area. Like I mentioned before, the best way to trade the markets in a higher vol environment is to use the 9/20 EMA when trends are more likely to hold. If volatility continues to drift lower and stay below 25, I think the 9/20 EMA entries should be good to ride swings higher.
Now, just because I think the market is going to drift higher, doesn't mean there are not some short setups. BBY comes to mind.
Since they adopted the Total Tech rewards program, it is my very strong opinion that this is going to be a net loser for them on people who are actually tech buyers. Why? Well -- I went through 5 different Mac Products in 7 months until I found the perfect Mac that I wanted. The 60 day return policy is insane. As a consumer, I love it. If I get sick of a brand new computer after 2 months, I can return it and if the product becomes obsolete and discounted -- I still get the full refund. Wild to to me.
The stock is retesting / failed weekly TDST and is still very much in a downtrend. I have no interest in being involved in the long side, especially if you consider the fact that almost every tech retailer has ended up bankrupt.
LABU (3x biotechs)
This one completed a daily 13 sequential after completing the weekly 9 sell setup. What this looks to me like is the 13 upside cont on the weekly might be active and this could be the entry. The short term is quite oversold on the SPX chart and I think you see hedges start to come in -- so stay patient on this one. Risk levels are still pretty wide down below 4.
With all of the hoo-ha in the Crypto space, Coinbase's largest competitor just went out of business and has weekly active DeMARK buys. I'm going to buy this below 40 with a tight stop at 30.
Bonds are sort of in a no-mans land but only 7/9 on the sell setup. Weekly 13's are complete and the trend has reversed to the upside. The question now is a matter of flows: will institutions and life insurance organizations start to stop hedging interest rate risk and press this market lower? Well, this is up to the macro. It is our view that CPI on an acceleration basis has topped. Now we might average 5%+ inflation but there it is very unlikely we will ever see an 8%+ print again.
If that is the case, the bonds are a monster long term buy. I've been buying TLT in my IRA for the long term to get a 60/40 ratio on stocks and bonds for investment accounts.
I know it's the same old mantra, but look: the market isn't going down much and the technicals are reflecting everything from the above. Let's trade this accordingly.