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UVXY

Global Futures Skid, Volatility BidHey guys, sorry I miss you on Friday, I was working on my website. Let’s get right into today’s analysis. Global futures drifted about 1% lower in the overnight session, after the US majors saw new all-time highs (again) on Friday. The Vix is spiking notably, and is up over 11% this morning, as the risk/reward swings even further to the downside. President Trump is being blamed for much of the chaos at the Capitol, as he explicitly said, inter alia, that he would join the march alongside the “freedom fighters,” down to the capitol, where a large group of American’s gathered to express their outrage of the election result. Talks of a second impeachment are circling the MSM, of course, as the democrats take advantage of the opportunity to inflict further damage to the reputation of the Trump Administration, and by extension, the Republican party. Treasury yields continue to rise, and we’re now sitting around 1.11%, among the highest levels since March 2020, putting upward pressure on the dollar, which is up notably on the day, and is now back at a 90 handle. According to Mohit Kumar, a Jefferies Analyst, “Investors are getting worried about a rise in yields.” Kumar also said, “Risky assets have come a long way and they are now in a pause or profit taking territory.” I think that goes without saying, but it’s always good to hear analysts, and the sell-side in particular, which we're seeing, talking about profit taking. I also think we saw a massive short squeeze last week along with profit taking, similar to the likes of the November M1 explosion driven gap parade. With the world now expecting “Trillions” in new stimulus from the incoming democratic administration, this could be an extremely volatile week with wide swings in intraday sentiment. We'll be keeping a close eye on the Put/Call this week. In crypto, as we discussed last week, Bitcoin was looking ripe for a correction, and in the overnight session, Bitcoin, along with most of the crypto space, saw a massive correction by as much as 20%, back to a $32,000 handle. Twitter stock is seeing some pressure in pre-market trade, and is down over 6%, after permanently banning President Trump. Clearly, the 70 Million + Americans that voted for him see this move as yet another tactic by the Big Tech cartel to silence conservatives, and specifically, Trump’s audience. No economic data to discuss today, but after last week's weak payrolls report, I suspect all eyes will be on Thursday’s jobs report. SPY is sitting just under the ascending channel formation (green line) from April 2020, around 381.50. We’re set to gap down, which would imply a near perfect rejection of the ascending channel, leading us to believe there is further downside to at least the top of the white channel around 378. Major support sitting at 370.80, which is the 21 day EMA, and also around 367, which is the lower band of the white channel. If the white channel finally breaks, we’re looking at a convergence of supports around 360, where the top of the megaphone is sitting, along with the 50 day MA (361.22). Imo a september like correction is more than due, but something along the lines of March or even June, would require a stark shift in sentiment likely driven by an unexpected event. It could be the 10Y yield (risk free rate), breaking out to new highs, forcing the FED to tighten monetary policy similar to that of the taper tantrum in 2013/14. We'll have to wait and see. As I mentioned, we have a new website where we will be continuing with our live daily analysis. We’re offering a free membership (for now), so don’t hesitate to check out the link in our profile if you enjoy the live play-by-play. Thanks so much for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
9
Airplane ModeStocks are irrationally exuberant again this morning after soaring in the overnight session as tensions at the Capitol subside, and Biden is (finally) declared the victor of the election. Is anyone surprised to see another gap up this morning? I'm certainly not, but I do suspect that as we approach the top of the white channel around 378, which is an arms length away from the ATH, we'll see some heavy selling from smart money, who have not participated in the market rally since November. Don't forget that much of the rally coincided with a stark rise in M1, which rolled over into December's price action. Now that the very last few dollars of American's savings have been invested/spent, the only buyers left are corporations and the central banks. I'm not sure if you guys follow the global bond market, but approx. $13 Trillion is about to mature, which could lead to a cascade of defaults across bond markets. We're already seeing a spike in the risk free rate above 1% for the first time since March, which is only going to exacerbate the issue as CTA's begin to sell, and they may even potentially go short if yields continue to rise. According to a recent report by Morgan Stanley, if the 10Y yield rises another 1%, (from 1% to 2%), this could have a direct impact on market valuations (up to a 22% drop in multiples {PE} on the Nasdaq in particular). In other words, the 10Y yield could be signaling to investors, that an imminent market crash is coming. Having said that, we all have to be prepared for the fact that the FED might step in, like they always do, and change the rules of the game. In the jobs market, we saw another 790k American's file for unemployment benefits for the first time last week, while continuing claims remain above 5MM. The moral of this story will be that misallocated capital does not fuel productivity in the real economy. It debases the currency, and hence the purchasing power of the working class, while only the asset owning class benefits from the induced inflation-like consequences. Interestingly, the velocity of money is little affected by the current monetary debasement regime. If we were to focus on debt levels, for example, we'll immediately free up productive capital, and increase the velocity of money, leading to (actual) inflation, by the FED's metrics. But hey, what do I know, I'm just a trader. Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
56
Bear Flag or Channel Continuation?Stocks are being panic bid here at the open, so it's another win for central banks and hence the billionaire class. Blue wave, red wave, green wave, or purple wave, it means nothing folks. The way I see it, both the dems and the republicans want the FED to keep crushing the dollar through persistent easing of monetary policy, which primarily increases the wealth gap, while encouraging the working class to go even deeper into debt. It's a mean trick, and for some reason everyone keeps begging for it. On the fiscal side, dems want more stimulus (debt), and higher taxes (why the headfake about taxing when the status quo is that they will continue to print?), while the republicans want less stimulus and lower taxes, (in other words, FED please keep increasing the wealth gap, but don't you dare raise taxes at all to spend our existing money). Either way it's a lose/lose for the working class/90% of us. On the technical side, we're seeing either a bear flag/liquidity grab from the bears, or a reversal of the bearish sentiment/downtrend we observed at the beginning of the week. The 10Y yield is rallying hard today and for the first time since March 2020, we just crossed the 1% mark. Let's see how the roughly 15 Trillion in global negative yielding debt fears when they see that the US risk free rate is paying more than some corporate bonds. What if the bond market was about to crash, sparking a cascade of defaults across the corporate bond spectrum, where the majority of ratings sit at BBB-. Where would all that cash go? Probably not stocks, as they're mostly insanely overvalued, so maybe the best trade, notwithstanding the insane rally in crypto to date, is crypto itself. The sad thing is, Bitcoin is often used as a barometer of sentiment, and a hedge against inflation. So, if we saw a glimpse of deflation in markets, bitcoin would be down 50% similar to the crashes we saw at various times in the recent past. I've said it before and I'll say it again, sometimes the only way to win is to not participate. It's time to start increasing that income, which must keep up with the inflation we're seeing in every corner of capital markets. Let's see how the day progresses, and best of luck out there! Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
31
The Truman ShowSo yesterday turned out to be the worst start to a year since 2016 for markets. However, this morning's sentiment is quite bullish, as investors panic bid the majors at the open. SPY is back at the 50 period MA on the hourly (370.57), which also happens to be converging with the 21 period EMA (370.30). If 370.57 holds up as resistance, we could see a sharp rejection back to the 21 day EMA (368.25). If the 21 day EMA breaks, we'll revisit the white channel around 365, and potentially break through this time, paving the way to the top of the megaphone around 360. If we see increased bullish behaviour as the morning progresses, I suspect we may potentially revisit yesterday's opening levels around 375. Highly unlikely imo, but don't forget there's also a possibility we revisit the top of the channel which would set a new all-time high near 377. Personally, I'm positioned for the bottom of the white channel to fall out, and for a comeback of the almighty megaphone. Imo you have to ask yourself, what does it matter to markets how the Georgia elections turn out, or who the President is for that matter, when both the dems and republicans are cheering on MMT, while the real economy crumbles? All I hear these days in politics is "Print! Print! Print!" The narratives that explain price action each day, are the equivalent of the story of Santa Claus coming down billions of chimneys in one night to deliver secret gifts to your children while you sleep. They're just stories folks, often with no connection to price action whatsoever. Take eveything you hear and read with a pinch of salt as we must not confuse narratives with truth. The game is all about reading between the lines, and I'd like to leave you guys with a recent quote from legendary investor, Carl Icahn, "In my day I've seen a lot of wild rallies with a lot of mispriced stocks, but there is one thing they all have in common. Eventually they hit a wall and go into a major painful correction. Nobody can predict when it will happen, but when that does happen, look out below.” Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
16
Stocks Gone WildHappy New Year guys! I hope everyone had a relaxing and enjoyable holiday season. Let's get right into today's analysis: Stocks have gone wild! We're seeing essentially every risk asset on the planet melt up as the dollar continues it's slow, and incredibly painful demise. The money supply continues to rise as investors raid their savings accounts, and banks lend their excess reserves in search of more attractive returns than 0.10%, which is the current IOER rate. Based on M1, we can see that investors are clearly raiding what little savings they have left (70% have less than $1,000), as the concept of downside risk becomes folklore, and inflation begins to rear it's ugly head. I think it goes without saying that the line between fantasy and reality has become completely blurred, and so with our hard earned money at risk, we must take this into account, and trade accordingly. The S&P hit a new all-time high in the overnight session, kissing 3,773.38 before giving back some gains this morning. European and Asian markets are solidly in the green, apparently off the back of the media's favorite 2 suspects; hope, and optimism (around a vaccine). Nothing to do with central banks relentless obsession with parabolic debt levels, and perpetual dollar debasement, only to achieve ever-diminishing (real) returns. It now takes over $7 of debt to achieve just $1 of GDP growth, and the divergence is growing exponentially. Is this greed, fraud, stupidity, or all of the above? Mean while, Crypto, and Bitcoin in particular, are skyrocketing higher as the dollar, and fiat in general, looks increasingly like toilet paper. Touching on SPY technicals, which we'll discuss further in today's live analysis, the bulls successfully broke us above the megaphone pattern, solidifying it's role as a key technical support going forward. This was a surprise to me, as I expected the bears to show up with a monthly rejection in the final days of December. However, instead we saw no quarter end rebalancing, no profit taking, no selling, and next to no flows into risk protection. It goes without saying, but I'll say it anyway, there's simply no fear in risk today. Looking ahead this week, we'll be keeping an eye on the Georgia run-off elections, FOMC minutes on Wednesday (for more bedtime stories from Powell's Printer), Thursday's initial claims print, and Friday's payrolls print. As always, I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
29
Knock, Knock, who’s there??? Volatility rise!! 📈 Long on UVXYHi fellows, as many of us expecting stock market correction on main indicies, finally there are some signs of rising volatility in near future. Yesterday strong rebound of TVC:VIX is some fresh air in my face :) AMEX:UVXY is one of instruments you can participate on rising volatility or hedge your portfolio in risk off days. Today and next few days will be risk off very likely. So here is my idea. Yesterday price action on AMEX:UVXY was pretty strong. Its rebounded from strong supply area 10.20-10.60 and bounce back to rising trendline. Now sitting at key support 11.05. You can see rebound is supported by very clear defined divergence on long term CCI indicator. Here is my trade: ------------------------Trade setup --------------------------- Entry: 11.05 Stop Loss: 10.77 Profit target: 12.22 Time stop: 5 days ------------------------------------------------------------------ If you like the idea, do not forget to support with a 👍 like and follow. Leave a comment that is helpful or encouraging. Let's master the markets together.
CBOE:UVXYLong
by Tomasgei
13
It's All About the BASE - DXY $94 by end of Jan 2021The US dollar as represented by DXY has reached critical support (more evident on quarterly chart), and will now being to squeeze upwards. Directional change in dxy usually happens around political catalysts and I believe the bottoming of DXY here lines up a little too perfectly around inauguration. We're targeting $94 by the end of Jan 2021. Further confirmation of this can be seen in TLT and BTC. TLT has also reached LT support and has been trading within a tight channel, which it should move out of in the next 2 weeks. BTC usually tops where DXY bottoms. And it has been on a historic run as of late. Every major index has topped, uvxy has found support at ~10.8ish and should squeeze out of it's descending triangle soon. Targeting $40 by January 8. Enjoy! (
TVC:DXYShort
by sapientosapien
Breaking: Money's Growing on TreesSocialist US President, Donald Trump, is begging congress to hand out $2,000 to every man, woman, and child in the country. This is an extraordinary thing to witness from a so-called Republican President, who, by core party value, should be both socially, and fiscally conservative. The question I keep asking myself is this: If $2,000 is going to be better than $600, then why not make it $1 Million? Why not pass a $25 Trillion stimulus proposal, then there's no need to worry about GDP next year, right? Why tax anyone ever again? Why should anyone look for a job? Why should any money flow back to the government if it grows on trees? *Pulls out a chunk of hair* This morning's data was mixed with personal spending, and personal income coming in weaker than expected, while jobless claims beat expectations, but remains elevated at over 800k. We still have over 20 Million Americans on some form of unemployment. Continuing claims stand at 5.34MM, and later on this morning, we'll see new home sales, consumer sentiment, and crude and NG inventory prints. As we discussed yesterday, there was a strong possibility (you know with all the fraud and ponzi behavior by centrals banks and governments alike), that we might gap up this morning. So said, so done. They gapped us up to the key 368 level, where the 50MA on the hourly is sitting, possibly to induce a last minute 'Santa Rally.' At the moment, it appears the bulls are getting yet another rejection at this resistance level. We'll see how the day progresses - I assume investors are feeling great about how much Trump loves them. Mean while, his properties all over the globe are doubling in value, along with all the rest of his assets, and all he has to do is perpetually dilute your hard earned cash. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
63
Preparing for the Greatest DepressionAccording to James Knightley, Chief Economist at ING, "The agreed fiscal relief package will undoubtedly help mitigate some of the negatives but unfortunately, it won’t be able to fully offset the effects of people staying at home as many businesses face tighter restrictions or are even forced to close." Obviously $900B, 4% (2 weeks) of GDP, can't offset the effects of lockdowns/catastrophic debt levels. With winter around the corner, and lockdowns littering the globe, I suspect this is only the beginning of what may turn out to be the greatest depression in our history. I believe global markets are about to crash, the likes of which we've never seen, and here's what my wife and I are doing to prepare: - As some of you may know, my wife and recently moved. At our new place, we're saving $400 per month on rent. - We've just sold our car, which was costing us about $800 per month between payments, insurance, and gas. With the cost of alternative transportation included, that's already $900 per month savings. - In just a few short months, we've successfully reduced our monthly spending by about 30%. - We don't socialize at restaurants or bars anymore, for many reasons, but mainly because we know we'd be blamed for killing grandma by the community. - We don't shop as often, because we've chosen to pay off debt instead, and increase savings (Gold, Silver, Platinum, Tips, Cash). - Our Christmas spending this year was down about 50%, notwithstanding the rising cost of goods and services. - This is our new norm, and all the extra cash flow and lower debt levels, feels absolutely incredible guys. I don't know what anyone else is doing, but I imagine many other households are becoming more lean, and are paying off debt/saving money instead of spending. If we see even a fraction of households in the US cut costs, like my wife and I did, GDP (the real economy), is going to get smacked even harder. Having said that, I do suspect many households will continue to trust in the FED, and their seemingly reliable governments, and won't pay down debt, won't save, or stop shopping on credit. This is really unfortunate, and is only going to exacerbate the problem, leading to mass insolvencies when rates eventually do rise. Global Market Update: - US majors are mixed at the open - Vix is getting hammered after a strong rally to 31.50 yesterday - European markets are in the green, with DAX and Euro Stoxx 50 lagging behind - Asian markets are solidly in the red - USD is holding onto a 90 handle - Gold is down marginally to $1,871 - Q3 GDP up 33.4% vs exp. 33.1% - GDP deflator 3.6% vs exp. 3.6% - At 10AM we get Consumer confidence & Existing home sales numbers (exp 6.8MM) Thanks for your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
35
Well, That Escalated Quickly!Hey guys, so as we discussed on Friday, the short-term bearish harmonic has now broken, and we're seeing some aggressive selling this morning off the back of the new stimulus deal, mutated covid-19 strains in the UK, and mass global lockdowns. For the few bears left standing, the megaphone is now back in play at 359. Today's supports are 363.30, 362, then finally, the almighty megaphone baby. We've been waiting patiently for this shift in sentinent to come in the form of a sell the news event, and so I know many of you are excited to finally see a notable correction. The monthly candle has always looked like an anomoly to me, and price action in November and December felt almost like an injustice. If today's selling persists, and we lose 359, the bulls are in serious trouble. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
14
Coming Soon: Price DiscoveryA gap down on Quad-Witch? The FED must be panicking. After hitting all-time high's yesterday (once again), SPY is seeing some heavy selling pressure here in the first 30 minutes of Quad-Witch, along with the rest of the US majors, which are down about .3%. The intraday bearish harmonic appears to have broken, and we're now back to a 369 handle, just north of the 50 period MA on the hourly. On the daily, our first major support is around 366, then the 21 day EMA at 364.93, and the recent low/bottom of the ascending channel from Nov 9-10th, around 362. I'm expecting to see some fireworks today during power hour in particular, and potentially see the Vix break above 25 into the close. This could pave a short path to 32. I'll be watching the Put/Call ratio closely for signs of a breakout, and a clear shift in sentiment (back to reality). The megaphone is still in play on the monthly, and if an outside reversal candle does emerge by EOY, the bulls are in serious trouble. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
29
Tomorrow is Quad-Witch/Freaky FridayThe third Friday of March, June, September, and December, is Quad-Witch day. This is when stock index options, stock index futures, individual stock options, and single-stock options, all expire on the same day. On Quad-Witch day, we tend to see a spike in volatility off the back of a roughly 40% increase in volume (on average). We will see roughly 45% of all S&P options expire in December (18th and 31st), with the bulk expiring tomorrow. Based on the current state of the Put/Call ratio, most of these options are calls. Based on the fact that we're at all-time high's, economic data continues to deteriorate (the best and most timely indicator being jobless claims), Stimulus deal coming any second, vaccines priced in, etc.. I would be on the lookout for major fireworks at power hour tomorrow. As for today, I suspect we may see the end of the Bearish Harmonic pattern playing out on both the short-term timeframes, and also on a larger scale, shown clearly on the daily and weekly timeframes as well. I'm calling 373 as the top, and then I think it's going to get ugly from there. Let's see what happens next. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
15
Possible Bearish Harmonic (15m)Possible bearish harmonic XABCD pattern showing potential upside to 373 in the interm. 373 is the top of the recent ascending channel formed from the Nov 9th high, and Nov 10th low (in white). The top of the channel also happens to converge with the longer-term ascending trendline from the April lows (in green). Let's see if we finally get that monthly (outside reversal candle) rejection we've been waiting on, to take us back below the megaphone trendline. Homebuilder sentiment is shifting to the downside, and alongside a notably weak retails sales print this morning (-1.1%), we're definitely starting to see growing weakness in the real economy. Apparently congress is close to a stimulus deal, and it sounds like they're serious this time. Let's see if the culmination of stimulus news, vaccine rollout news, Biden winning the electoral vote news, and the real economy breaking down news, is enough resolution bring about a sell-the-news event this week. It's time to prick a hole in the largest credit, and rate driven bubble in history. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
6
Buy the Close, Sell the OpenIn a recent report by Bespoke Investment Group, it was revealed that one of the most profitable trades on Wall Street, since 1993, was to simply buy the S&P close, and sell the open. If you did just that alone, you would have seen a whopping 800% return to date, vs. doing the opposite, which resulted in a shocking 10% loss over the same period. According to Zero Hedge, this simple but effective strategy has seen the S&P rise 660 points since May, while doing the opposite has shown essentially no change. On the year, the buy the close, sell the open strategy is up 9.2%, vs the buy the open, sell the close, which is up just 2.6%. I think it goes whithout saying that markets are being manipulated from every angle imaginable, and it's clearly nothing new. We've all observed the seemingly relentless gap up's, like the one we're seeing again this morning, persistently distorting valuations, and acting as a money printer of sorts. It's frustrating when these types of schemes appear, because you know it's no accident, and market participants are willfully tarnishing the integrity of markets, and along with it, the mechanism of price discovery. Personally, I'm sleeping great now that I have zero long exposure. Alternatively, with little if any upside left in markets, based on my own technical and fundamental analysis, I'm positioned for a repeat of the March crash. I think the megaphone will hold on the monthly, and we'll see a 10% correction in Dec/Jan, at the very least. I appreciate your time today guys. If you enjoyed the analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. Cheers, Michael.
AMEX:SPYShort
by Hedge_Of_The_World
12
Stocks Soar on Vaccine RolloutIt's Vaccine Day, Yay! Maybe now, Mr. Market, we can see a sell-the-news event? Don't hold your breath, folks. After a strong gap up overnight, the US Majors are being panic-bid here at the open. Vix is crashing down to a 22 handle, erasing all of yesterday's gains. The Put/Call ratio shows the incredible shift in sentiment over the weekend, going from a 50 handle on Friday, down to a 34 handle on the open. Holy sh*t. The 10Y yield is still hovering just above the 50 period MA on the weekly (.867). The dollar is down to a 90 handle. Asian markets are all in the green, while Eurpean markets are trading mixed. Let's see how the morning session shapes up as we approach the all-time high's, once again. Stay tuned for live updates throughout the day, and thanks for your time today guys! If you enjoyed our analysis, please hit the Like button and subscribe to our profile. The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. - Hedge.
AMEX:SPYShort
by Hedge_Of_The_World
12