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MACRO - VOLATILITY & SP500 -$VIX - The Gamma Bubble - Blood MoonThe Gamma Bubble is about to burst. - High implied volatility on VIX... Barely moved during the market selloff on Friday. I think when indicators that usually inverse each other stop correlating with each other, investors are just completely exiting the markets. - Over $100 Bn in bonds liquidated... Liquidity in the bond market was the only reason that I was able to remain bullish with some confidence in the equities market until now. - Dark Pool Index indicating that institutional investors have been exiting positions since January. The last time such a movement was seen was in Feb. of last year. - SPY with a scythe... algorithms selling off, while price being painted up for gamma exposure and theta burn: In today's market, the lit pool markets are secondary to dark pool markets and the options market. True price discovery occurs after options have expired. - $1.9 T Stimulus Bill passed, but I speculate it will only increase the scale of the liquidity crisis to come... - $100 Bn~ was about the amount that the MM would need to have paid out from their exposed short positions on $GME at its previous high, when their 140% short interest via naked shorts was raided by retail investors, before Robinhood and other brokerages restricted buying. We saw exposed institutions liquidate their long positions across their market to defend their short position here. - Congress only increased media exposure to the issue, and GME is preparing for another wave of retail impulse buying... By Elliot Wave Theory, the next impulse wave will take $GME higher than the previous high. - Retail investors are certain to use at least some of their stimulus to fuel this movement. - Not only GME, but AMC seems to be a likely candidate to converge with GME's price, via short squeeze + gamma squeeze. There are other highly suppressed stocks that are also rising. - If SPY also begins a downtrend, it is the greatest candidate to gamma squeeze downwards, due to colossal implied volatility caused by the strength of the MM's algorithmic pinning. Simply put, if SPY falls, it will fall hard and fast, and the OTM puts will fuel the short squeezes even more. This is big trouble. A liquidity crisis in the making, if the short side institutions do not unwind their positions. - GME - AMC I took a hedge position, risked off, and began short positions on Feb. 10, more based on technical indicators, but I think this is more confirmation. We will have to see if the Stimulus Bill can prolong this, but I think many are in agreement that a correction is imminent.
TVC:VIXLong
by UnknownUnicorn1043646
8
It doesn't get much more obvious than this.Chances are good that the charts for AMEX:SPY and TVC:SPX will continue to print repeated patterns. They have been doing so for an entire year, so I don't expect them to suddenly change trajectory. I honestly expect the market to crash within a week--if not tomorrow--judging by this fractal. And although it is not shown in this post, there is also major bearish divergence on the RSI for the weekly and monthly charts and bullish divergence on the same timeframes for the VIX . It sure will be interesting to watch. Good luck to all.
OANDA:SPX500USDShort
by CLAIR_V0YANT
6
SPY is going down these next two months 🧨🔨In Elliott Wave Theory there are only two kinds of moves: Impulses , and Corrections . We can all agree that since November, this grind up is not an impulse, which means... that this is a correction. Wave B's are nicknamed "The Suckers Rally" and boy are there a lot of suckers, including myself lol. VPVR points to a retest of last years high (big money buy zone) >Max Pain next month is at 375 >Max Pain the month after is at 369 >It would also explain the HUGE bearish divergence since September. I'm rolling with this count, as it is the only one that makes sense from a textbook perspective. Todays idea is also in line with the first bearish outlook I ever gave spy on Jan 23rd.
CME_MINI:ES1!Short
by Eloquent
2
Granolabar's Gap Down Guide (my own style)Introduction Within the past week, AMEX:SPY has become increasingly volatile, with massive gap ups and downs followed by all day runs extending more than 3% in either direction. This is apparent with a cursory glance at the following chart. With this volatility comes uncertainty, especially for those who are swing trading on the timeframe of a few days to a few months. However, we can use this increased volatility to our advantage. i am going to introduce my way of trading these days, particularly the ones involving gap downs. Identifying the Setup Identifying the setup is relatively simple, but there are a variety of factors that can improve your chances of success. Firstly, the stock needs to have gapped down overnight. This one is quite obvious and easy to identify; look for a literal gap in the prices going from after hours to premarket, like those identified in the following chart of SPY. Secondly, there are a few things that can improve the chances of this strategy playing out. For example, if the stock recently hit a supply zone and rejected, the gap down is more likely to be followed by more downside as the stock is already in "pullback mode." Additionally, trendlines are another great thing to keep in mind. For example, SPY recently hit a nearly 4 month long strong trendline and rejected. Generally speaking, the larger the timeframe that the trendline is identified on and the more "touches" it has, the stronger it will be. I often find it useful to work my way down from the 1 month or 1 week chart down to the hourly to identify trendiness that I need to keep in mind. Trading the setup To trade this setup, I like to primarily stick to the 5 minute chart. The one minute chart has too much noise, while the 15 minute takes too long for confirmation that you would miss a sizable amount of the move. Once you are on the 5 minute chart, draw a horizontal line at the bottom of the premarket low, as shown below. This will be the critical value to watch. Theoretically, you want to enter when that line breaks , BUT there are often fakeouts around these critical levels. To know when to enter the trade, I watch the candle sticks. First, there must be a 5 minute candle that closes below the premarket low. Then there are two possible scenarios from here. Scenario 1, the next candle immediately pushes below the low of the first candle. In this case, you would take puts or sell short as soon as the second candle breaks the low. My reasoning for this is that if the movement is strong, the second candle would not hesitate to make a new low. It is better to enter on the break than to wait for the candle to close and miss out on potential profits, which are often pretty sizable when things are moving quickly. Notice in the below example that had you waited for that candle to close, you basically would have missed half of the entire fall, which lasted 4 5 minute candles. Scenario 2, the next candle does not immediately push below the low of the first candle. In this case, you would wait until there is a candle that closes below the low of the first, instead of merely making a new low. My reasoning is that if the momentum is not strong enough for the second candle to immediately make a new low, the confirmation candle to enter needs to be more definitive. The play is not invalidated because the first candle closing below the premarket lows indicates that there is downwards pressure. In this way you minimize the likelihood of shorting a bear trap while also capitalizing on the fall. Let's Talk Take Profit and Stop Losses Now that you have successfully entered the position at an optimal place, the next thing to consider is where you want to exit, whether that is to secure the tendies you just made or protect yourself from further losses. Note, this part is completely up to you and your risk or reward tolerance. Assuming that it all goes to plan the the stock starts to fall: I typically trade weekly options for this kind of play, as it is a short term play. Because options premiums move quickly in both directions, I will take profit at 25% with about half the position if the candles are getting smaller, indicating that the trend may be weakening. Then I will set a stop at open, meaning that I will sell the remaining portion of the position if the contract goes back down to my purchase price; this guarantees that ultimately the play is profitable. However, if the candles stay rather large, I will hold the position until the candles do start to get smaller, and sell half the position there, often around the 50%, 75%, or 100% profit mark. If the option does hit 100% profit, I will almost always sell half, with very very few exceptions. This ensures that even if the other half of my position expires worthless(worst case scenario), I come out of the play completely unscathed. If the play does not go according to plan: Let's assuming that right after you enter based on the conditions above, the stock reverse to the upside. Now the question becomes, when do you sell to prevent yourself from taking major losses. For this I use my EMA clouds, or simply just EMAs with the region between the lines shaded in. I typically have a 5/12 EMA cloud (green) and a 34/50 EMA cloud (blue). As soon as one candle closes above the 5/12 green EMA cloud on the 5 minute chart , and the next candle closes above the first candle, that Is when I take the loss and move on. Often times, when playing this strategy, the price will come back up and retest the break line; do not panic if the position is immediately red, but also stick to the stop loss rules mentioned above. This cloud strategy also applies to closing the last half of the profitable position mentioned above. When you are left with half a position at 100% profits or more, I will wait for reversal to sell. The reversal tends to happen when one candle closes above the 34/50 EMA cloud on the 1 minute, and the next candle pushes past the first high. There are also many other ways to market the bottom, such as bullish divergence, engulfing candle, abandoned baby, etc. TLDR This is my way of trading gap downs that utilizes candle sticks and the EMA clouds to determine Stop loss or Take Profit places. Simply put, buy puts when the price cleanly breaks the premarket low, ride with the clouds until they suggest a reversal or hit a stop loss point. if you have any questions or comments, please feel free to let me know. I would love to hear other perspectives or criticisms. Also, the "clouds" are just EMAs filled in with crayons, but if you want the script, it's in my profile.
Editors' picks
AMEX:SPYEducation
by granolabar_trades
30
SPY - high probability rounded retestThe dump earlier today was an emotional one. This is apparent from the big red candles going from the 0.786 level to the 0.5 level in 7 hours. It's investors acting on fear. This, combined with the bounce off of the support zone & the 0.5 level gives us a recipe for a quick recovery. Those who sold off realise they're wrong, buy back in. Those who sold the breakout are feeling the heat, buy back their position. Those who are taking profit on their short, buy back. Our next big resistance is the 6 touch 0.784 level @ 3890. This is a great place to enter a short. Now, our target will either be 3852 (forming a higher low), or knowing all the pending orders sat at 3808~/0.5 level have been filled, we can aim for the next level at 3775. Stop loss will depend. It's really down to your discretion, but I'd be inclined to use a wider stop to avoid getting wicked out. Let me know what you think and give me a follow for more. Happy trading! P.s. this isn't financial advice. I just like drawing lines on charts
CME_MINI:ES1!Short
by pasojov
S&P $SPY Pulling Back: Is 370 the ultimate completion?$SPY has been pulling back consecutive days and we referenced the gap-ridden ascent in previous TV ideas. This is a great time to watch for buy zones: TSLA, among many others, are now sitting in great positions for long plays. The S&P is seemingly due to retrace lower regions though, so as of now: This trader's $ is fully parked. It has been since the short squeeze last week that has only rendered the positions once occupied, redder still. FCEL in particular, failed to fulfill an ascending trade channel and has pulled way back since exit last week. The notion that several stocks, including the S&P itself, complete a head and shoulders formation, is fully in play. It is a great time to be out-of-position, whatsoever the case. We're looking for more pullback is the TL;DR version of this. Thanks. -BDR
AMEX:SPYShort
by BDRTrigger33
US Market Technicals Ahead (16 Feb – 19 Feb 2021)U.S. stock markets will be closed on Monday for the Presidents Day holiday. Investors will be waiting for the FOMC minutes due Wednesday for further clarification on the next monetary policy steps in the holiday shortened week ahead and while earnings season is starting to wind down there are still some big names left to report. On the economic calendar, U.S. retail sales figures and industrial production for January will be the main events to watch. Market participants will also be closely following Thursday’s hearing before the House Financial Services Committee on the recent trading turmoil in GameStop ($GME) and other heavily shorted stocks and bitcoin is closing in on $50K. Here’s what you need to know to start your week. S&P500 (US Market) The benchmark index ($SPX) continues its February gain with +1.27% for the week. This rally further established a new all time high for $SPX at 3,941 level. At the current junction, $SPX exhibition of a Bearish Divergence pattern that was highlighted last week remains in play; as the daily rally of $SPX is accompanied with a volume exhaustion. The first signs of weakness in this rally will require a re-test of all-time high resistance turned support at 3,870. 1. Stimulus President Joe Biden’s $1.9 trillion Covid-19 relief package will move to the next stage during the week, with the House Budget Committee pulling all the components into a single piece of legislation. Biden’s proposed spending package, coming on top of $4 trillion enacted by his Republican predecessor, Donald Trump, would have important consequences for a global economy that is slowly and unevenly recovering after last year suffering its worst downturn since the Great Depression of the 1930s. On Friday, U.S. Treasury Secretary Janet Yellen urged G7 finance leaders to provide more fiscal support to promote a robust and lasting recovery, telling them “the time to go big is now.” 2. Earnings The S&P 500 ($SPX) and Nasdaq ($QQQ) closed at record highs on Friday as expectations for new fiscal aid from Washington to help the U.S. economy recover bolstered risk appetite. Investors will be looking ahead to earnings from Walmart ($WMT) on Thursday for insights on the strength of consumer spending. Investors will also be looking at earnings reports from hotels, cruise lines and other businesses that have been badly hit by the pandemic for indications of which could be the first to bounce back as it recedes. Hilton Worldwide Holdings ($HLT) and Hyatt Hotels ($H) are expected to release their results on Wednesday, followed by Marriott ($MAR), Norwegian Cruise Line ($NCLH) and TripAdvisor ($TRIP) on Thursday. 3. Economic data The highlights of the U.S. economic calendar will be data on retail sales and industrial production for January, which are expected to show that the economy got off to a strong start in 2021. Investors will also be watching Thursday’s figures on initial jobless claims with the recovery in the labor market remaining slow. Labor market woes strengthen the case for President Biden’s proposed $1.9 trillion recovery package, which is under consideration in the U.S. Congress. Meanwhile, minutes from the Federal Reserve’s January policy meeting are due out on Wednesday.
ULong
by jfsrevg
$SPY is set to PlummetAMEX:SPY The S&P 500 is just about fully overextended and we are due for a good size correction. Fundamentally, most markets are just full of froth at this point with the Fed continuing to keep interest rates near the 0% mark. Numerous fortune 500 companies balance sheets are extremely over leveraged and seem to be taking on more and more risk. An example of this would be Tesla purchasing $1.5B worth of Bitcoin with their cash reserves today. If the markets were to plummet tomorrow, and Tesla investing almost 8% of their cash into a highly speculative asset would have catastrophic implications if they both were to fall simultaneously. Rarely has Finance rewarded individuals for long when the average joe is comfortable and confident. Technically looking at the 1D chart we can see various signs of concern. The RSI is not quite yet oversold but has been flirting with the idea for quite some time. Every time the RSI has gone into "oversold" territory we saw at least a -10% drawdown. You will also notice the MASSIVE bearish divergence between price and RSI (highlighted by the purple lines) that has been building for over a year, which has been the entire time of the "V shaped" recovery. The last technical component that stands out to me, which happens to be my favorite, is that price has been following the red fractal on the chart since late November. This fractal is an analog of price from Mar/Feb 2020 and we all know what happened there... I see price topping out between $400-405 and having a -30% drawdown to $280 before any sort of basing bottom is attempted. After that, price has the upside potential of $500+ Be safe out there and take what the market gives you. - PennyBags
AMEX:SPYShort
by PennyBagsCapital
3
SPY On Life Support Or On The Verge To Blow?I think we can all agree the market seems to have just been crushing this past year, with TONS of money being injected in and specific large companies doing great throughout the pandemic...but when does this slow down? The WallSteetsBet thing has some positives and negatives in my opinion....I am 28 so I feel like I am a middle child between two generation and have a good reasoning with both the older and younger generations. With that being said, WSB brought in TONS of new retail investors from the younger generation that Robinhood and Webull type platforms hadn't brought in yet.....dumping all their money in not only the "MEME" stocks but across all their favorite sectors....whilst the older generations that still watch the mainstream media see the market as a scam and their fear of "the kids trying to crash the market" has set in and they are pulling 401k and long term investments to get things like gold and silver....or just to hold cash. Now back to this surge of new retail investors that came into the market, lets all be real here....the hedge funds are here to make money and they see this....my PERSONAL OPINION is that they let these kids get in, run some of these sectors up one last time(after that nice pullback/buying opportunity last week) make them feel good about their "investments" and then they pull the rug as many of these companies have had such great run ups since March....it seems like it would be great time to get some nice money off the top. You can see the bearish divergence as well as the sell zones I have created in my attached 1 hour chart. If you pull up spy and look at the last couple double tops, like the one we are seeing here, it is usually followed by a decent size correction....but we shall see. With all this in mind, I am only 6 months into trading and will be the first to admit I don't know the macros and behind the scenes like many others on here might....so please comment your thoughts and opinions so we can all learn!
AMEX:SPY
by TradeWithZack
5