Santa Rally VS Fed Policy in a Box Last week was a great week if you were a bull.
TSLA and SPY squeezed past a bear market despite overwhelming fear and uncertainty.
Santa Musk continues to sell past the original 10B he said he would, early speculation is he is at 15B and will continue to unwind .
We could see more short squeezes as a driving factor.
I've noticed a pattern start to emerge in S&P futures as consolidation occurs overnight at the previous days point of control and massive short squeeze during regular trading hours (RTH) around 9-10am.
Another pattern I noticed in overall indexes is that bitcoins price overnight and early into the next day give an early indication of sentiment (buy or sell) so I created a script to show the difference in bitcoin open/close for the specified time period.
Don't count on it though, but I have added it to one of my early morning checks to decide if I'm buying or selling during RTH.
Finally, Volatility Master Cem Karsan tweeted over the holidays about the Feds policy in a box.
He is basically saying the Fed has been exposed and trapped to do anything about an impending recession. I created a chart to illustrate what he was tweeting about the Feds policy in a box.
An important date coming up is January 19th and VIX Options expiry date.
I suspect we'll see another unpinning of VOL like we saw after the Thanksgiving Weekend.
regardless of what happens. the market is getting spicy. You can see the range expansion CEM has been talking about (SUMO market) with wider distributions (up and down).
These are my observations only. Not Financial Advice.
Trade Safe.
