August did not end well for Buyers. Rate Creep across the curve applied pronounced pressure.
RISK OFF is in trade across all Sectors within the X Complex.
TNX from a Rate perspective - Rate instability and lower rates?
At present, No. Bond VX is kicking up. It is however not damaging Banks as of yet, Financials are hanging on... slightly.
Will the VIX Spike to 38 to 41? The ES would need to collapse to and through 3600, SPY clearly to new lows. VVIX is seeing the out-of-control setup - Few Puts in SPY, Few participants in VIX Calls due to IV.
Prices sit at the most Pivotal area. Volimes are the main takeaway. Cumulative NYSE TICK took us sideways into the Close. Is the selling slowing down... that will depend on whether we see compression this week within a trading range.
Friday was a Trending Day. Can Buyers Create Balance here? It will require a SOH on the SELL SIDE.
Market Internals need to HOLD. Look below and fail is open as well.
11 of the past 19 September's ended up with 8 ending Down. The past 20 years have been highly volatile and I find it a generational approach more relevant than the overall historical as HFT/ALGO Trading has become dominant with increased Volatility - It's my approach this September.
Alladin will be extremely busy this Month - chalking up further gains for Blackrock. The Quarterly close will provide important answers to a Trend in decline at present. It is somewhat overstretched on OSCs, but Summation Indexes have more work to do. This can provide ever-increasing Volatility as we see the VIX Curve pricing in expanding VX for several months.
VIX - % Contango SEP M1 @ 3.90% OCT M2 @ 1.80% NOV M3 @ 0.37% DEC M4 @ 3.30% JAN M5 @ 0.25% FEB M6 @ 0.82% MAR @ Par with FEB
Year to Date - August opened the Dunk Tank once Powell delivered his May FSR Objective affirmation for Asset Prices and Interest Rate Forward Guidance.
A very brutal 2022 into the month of September - where Monthly, Weekly, and Daily timeframes are within poor Structure.
August SPY Monthly provided a very nasty inverted Hammer. Sellers stepped up in spades at the Highs and Sold to the opening Print, and through the Opening Print - to close on lows.
September's opening print did not hold the lower Body Bar on Friday - a poor close to the week with options settlement into the Cash Session.
Buyers were non-responsive at best. Sellers sold through on increasing volume for the 3rd consecutive day.
September's big events are ahead - the 13th CPI. Powell will provide color commentary on the 21st.
Last Month's Price action served to expand the range for Major Indices.
Monthly timeframes continue to hold Lower Highs, not a good look from the June Lows at present.
The 379.92 Level is the .382 and Pivotal for the Month of September, it is presently the initial implied Lower Range for the SPY on the confirmed break and closing below the Trend Line Support.
SPY 50% resides at 349.12 - the opening to a larger and lower low - into the Gap Fill @ 338.50.
Obviously larger targets below on increased panic and further Selling. Price is currently sitting on top of what was prior support.
I have cautioned for some time, Rates were a distraction too far larger issues within the Global Economy.
Repeatedly.
There are 3 legs to this stool.
Forward EPS, which remains incredibly high based upon earnings projections and their required adjustment too far lower expectations. These have been partially priced in after Powell dropped the Hammer. There is more work to do there.
QT remains a recycling operation - in through the out door with the appearance of an aggressive FED - while advancing CBDC via FED NOW/FED DIRECT at an increasing pace for Rollout. This and 41067 won't bode well for Crypto IMHO. Simply adding to the avalanche of impending exits which can be triggered by any panic in trade.
After large declines for all Major Indices... we've never seen a real Flush down panic, not one.
This is a once in 100 years Bear Market and it will be difficult to navigate as the Algorithms are growing increasingly predatory.
Be careful out there, reduce Size and be on guard for increasing VX in September.
Bearish Sentiments @ AAII are rising to 50.6% again. Stop runs on trailers and catching traders offsides should be anticipated.
We will see if the breakdown hammers this lower or price can manage to consolidate in a larger range this week - expanding to the downside but providing outsized squeezes based on the Gamma / Delta.
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.