4/22/20 MARKET CLOSE Update - Consolidated Analysis

This is my singular thread that encompasses all areas of review for the day in the market.

QUICK SUMMARY:


Today was an FVG (fair value gap) short squeeze fest:


  • Volatility was down to the exact levels that we looked at left behind for the FVGs from Tuesday's overnight gap up...VIX -7.55% and VXX -4.80%

  • UUP bullish setup getting EVEN more pronounced and is very close to breaking out...what is lurking out there that buyers are accumulating dollars for?

  • Indexes squeezed back up as we thought could happen and filled all FVGs left behind on Tuesday from overnight gap and instantly sold off - overnight action driving this market at the moment.

  • Oil ETF USO having all kinds of trouble with oil down more than 10% again today...

  • Semiconductors squeezed back to fill the fair value gap - SQUUEEEEEEEZZZZZEEE

  • HYG, XLF, and DIA all bounced and squeezed to exact FVGs and then faded afterwards

  • IWM left behind no FVG behind yesterday and moved freely. It also looked the weakest of all - truly a manic index at the moment trapped in the distribution box.

  • NFLX down -2.86% and faded hard now after earnings; AMZN stalling out and earnings tomorrow (fade?); but FB (+6.72%) there to pick up the pre-earnings pump-n-dump process along with GOOG (+3.85%). Good ole' pump-n-dump.

  • Internals still looking ugly(ier) across the board with price increasing - and today there was little to no volume comparatively. That is called a low-volume short squeeze...which leads to trapped buyers that get caught on sharp sell side raids at a later time clearing all those low volume prices off the board because no volume backs them up.

  • Absolute Breadth (I zoomed in on it in section below) into the daily time frame to expose something I found today...not looking bullish short/intermediate term.


Today was simply nothing more than the people that got caught shorting late yesterday (in the PM session probably) having to cover today after the open gap up as they were trapped...that is a constant theme right now gaps/squeezes both ways.


With a heightened volatility regime in firm control (VIX > 35) we will continue to see these wild overnight swings that create these FVGs that, if not filled same day, usually get filled within a few sessions if the action is not full on trend mode. Since we are seeing a 'next trend war' at the moment (between bearish intermediate restarting and bullish intermediate continuing) this shuffle back and forth between these overnight gaps will persist until it is done. This will resolve in one of two ways:


1. GAP-N-GO upwards that is not filled immediately that will pierce the distribution boxes and continue the bullish trend and also reset the MSLs (lower probability at this point)


OR


2. INTRA-DAY drop in the indexes that leaves no gaps behind and traps all buyers holding the bag or an overnight BREAK AWAY gap down that is not filled (one of these two is higher probability now)


How this resolves exactly we will have to see - but this back and forth drop then squeeze then drop then squeeze sets up a pretty gnarly move coming...be on alert for a wipe out move. Tomorrow is the continuing job claims fiasco and them PMIs at 10AM...and AMZN.

SECTORS:

Sector Takeways: Oil still trash but the rest of the indexes were all a one way street. One way streets now defined as either 'bear carnage' or 'short squeezes' - nothing else at the moment really exists. That is how I shall refer to them from now on unless/until we actually see a mixed bag and actual price discovery back and forth.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Positive

Internals: Neutral (very close to the zero line now)

Block Volume: Turned Up (selling underneath is diminishing/no buying yet)

GEX: Neutral/Positive


VIX/VXX Summary: We hit the first level of resistance for VIX yesterday and pulled back in the PM session and all day today. Very orderly pull back in VXX leads me to believe that it is consolidation. The FVG was filled today and then started to move back up. Keep in mind that my comments from yesterday are still valid. The next move is the 'move'. I noted that you really want 3/3 readings:


1. Momentum to x-over in frame two and go Bullish - check

2. Money Flow and Velocity need to be > 0.00 reading in frame three - still waiting

3. Block buying needs to be neutral or > 0 - check


As of today, technically we are still 2/3 (but really very close to 3/3). I suspect with price action tomorrow/next day we should see the setup for all 3 to be in alignment potentially (I will update twitter live feed as I see this come together for followers). When all three are in alignment, then you get major moves. Setups like this don't equate to guarantees, but they are highly probable.


Let's watch to see what happens tomorrow but be on the lookout for something next few days because of the bullish setup in the $USD and the bullish setup in VIX.

INTERNALS


TRIN:

Takeaway: No volume in the advancing today. You will see that confirmed in the Cumulative Volume as well. As noted above, advancing price with no volume leads to large swift drops as trapped late stage buyers puke out shares as their P&L incinerates.


ADVANCERS/DECLINERS:

Takeaway: Solid advancing day - pretty much par for the course when 100% of everything was squeezed (see the sectors for the green field day).


NYSE ADVANCERS/DECLINERS:

Takeaway: Momentum is still in a bearish trend and tons of resistance overhead. But today was a bounce day for NYSE AD. Large overhang of resistance to chew through for the bulls. Must hold support is below and noted.


CUMULATIVE VOLUME:

Takeaway: Advancing day and a weak showing for volume. This is negative for bullish case. As well the momentum is still showing bearish trend.


ABSOLUTE BREADTH:

Takeaway: MONITOR. Absolute breadth is modified today and is very important. Look at the last time that we got to these momentum levels on the daily time frame? Right before we faced new bouts of volatility. Will this time be different? Maybe, maybe not. This is worth tracking real time so I will post on twitter feed if this looks to be point to bearish action in the next couple days.


MCCLELLAN OSCILLATOR:

Takeaway: As I mentioned yesterday, this oscillator does just that...it oscillates. Momentum still bearish trend, but the value is heading towards a sell again. Truly manic at the moment.


INTERNALS Summary: Internals are not contributing to continued bullish trend. Not very bearish today (for the day) but don't look great intermediate term which underscores this being a short squeeze. TRIN looks bearish, AB BR looks bearish, Cum Vol looks bearish...you get the point. Bulls need to get this improving ASAP...

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (today they started dropping)

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral


SPY Summary: It is truly amazing how these squeezes are gravitating to our FVG levels like magnets. This was squeezed up in futures last night andmigrated exactly in RTH to the FVG and then turned down instantly. Momentum got worse, internals turned over more, block buying receded, and GEX got more negative. Volume was pathetic. Price did go up though...thin leadership again. Bulls have to get this up and out of the distribution box and turn the internals over. If not, price will catch up to these bearish internals and quant data in a hurry.

QQQ: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (x-over for velocity under money...bearish)

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


QQQ Summary: If you didn't look at price you would think this was a red day for QQQ. Internals turning down, GEX negative, momentum more bearish, and volume sucked. Price was up 4% hit the FVG on the nose and the dropped. Finished the day up 3%. FB is carrying this today with GOOG. Once these two (the last momo plays of the FAANGs) burn out - there is a total wipeout setup for QQQ. Keep an eye on this next few days/week. Once dealers are done with pump-n-dump on FB/GOOG (still decent size of the weighting of the index in those two) this could get ugly unless something drastically changes.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (but dropping even more today)

Block Volume: Negative

GEX: Negative


SOXX Summary: MONITOR. This was the ultra bull side short squeeze today. Late in the day Tuesday bears are road kill now. Having said that, once the afternoon squeeze hit the FVG and ran a little over - it dropped hard. I showed you the above NVDA GEX and showed you how the flip points work. You can see that even with this squeeze, nothing changed and it still is very close to its flip and also didn't make a higher low, but a lower high. The flip points are right below price and there is not a massively positive GEX. This is a short with a stop to me until it proves otherwise - internals are dropping, momentum firmly bearish, below the major pivots, rejected twice now...

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (dropping hard today)

Block Volume: Neutral

GEX: Negative

Put/Call Ratio: Neutral


DIA Summary: Dow Jones was same story as the rest, magnet up to the FVG via overnight gap which then lead to a short squeeze. Hit the FVG on the nose then collapsed. This happened to be the underside of the box. Kick in the balls at the close, BA noted that they are letting go 10% of their workforce (or some major division of it)...this is looking ugly for bulls unless they get internals turned up and get through that distribution box.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (but dropping harder towards zero now)

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral


IWM Summary: This had no FVG to fill so it meandered today. It was not squeezed and the buyers made zero progress with price action. Internals deteriorated notably with velocity x-under money flow which is usually bad. Up day in price and momentum didn't confirm it, it actually turned more bearish. Lots of work to do for bulls here but to their benefit, they are still in the distribution box...more clarity tomorrow small craps hopefully.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (dropped today heading for zero)

Block Volume: Positive

GEX: Negative

XLF Summary: Very similar outcome for Banks as IWM. Price gapped up at the open on the overnight squeeze, but could not turn momentum bullish. Momentum now more bearish than at the close yesterday and internals have turned over and heading for the zero line. 19.70 level is next support if this goes. Below that 17.97 and 17.54. In my mind, this has to turn back up into this box right here in the next couple days or this is headed for 17 handle and we will find out what time it is...

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (they actually started dropping today)

Block Volume: Positive (but first yellow bar in a while - buyers fading)

GEX: HEAVY Negative

HYG Summary: So much headwind for this ETF. Bad loans, negative GEX, 9 years of resistance overhead, oil derivatives exposure (which has to be a murder scene right now) etc. I digress...back to price. FVG was filled today that was left behind on Tuesday. Internals fading for the first time turning towards zero line, block buyers fading for the first time (from green to yellow) and momentum firmly bearish. Needs to get back into the box and up and through it or will struggle a great deal in the weeks ahead.

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Positive

Internals: Positive (turned back up)

Block Volume: Neutral

GEX: Positive

TLT Summary: Price gapped down today to fill the FVG from Tuesday (works both ways) and then immediately found support and buyers. Internals turned up, momentum looks to be heading for 100.00 reading (attempt to embed?) and GEX still positive. This looks to be bullish still. BTD.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Neutral (at the zero line)

Block Volume: HEAVY Positive AGAIN

GEX: Positive

UUP Summary: Still in a MONITOR status. Even more buying today pushing this even more into a coiled state (even more than yesterday). Price has yet match up to the internals...and with the VIX where it is, I am more concerned about some sort of risk off event lurking under the surface. This is something that I will monitor in my thread during the days ahead as it appears that this is being readily accumulated for some reason...

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish (but trying to flip it back)

Internals: Positive (but still dropping)

Block Volume: Positive

GEX: Positive

GLD Summary: Gold bulls out on parade today. BTFD right?! They turned it back up and are trying to get the momentum to turn back up and embed. That plus a breakout over the distribution box above would be bullish and lead to higher prices instantly. Failure at the distribution box will lead to a deeper pull back. I have no prediction on this, as it is more than a technical trade at the moment. All I will say is that if it breaks through the box, then the box becomes intermediate trend support but if it fails at the box, you will see a deeper pull back. Neither are long term bearish.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (declining even more RAPIDLY)

Block Volume: Positive (declining)

GEX: Positive

SLV Summary: This mirrored the indexes today and did not align with Gold. The indexes filled their FVG gaps that were left behind in the Tuesday overnight gap down. Silver did the same thing. The internals dropped more today, momentum is still firmly bearish, and buyers are waning. Resistance here is very heavy and bulls need to break this up and through tomorrow or Friday or this will visit lower levels. Not matching up with Gold or GDX for that matter...do they drag it up or does it drag them down.

GDX: Chart with Detailed Levels

Market Structure: Neutral (Bullish reading coming...probably?)

Momentum: Neutral

Internals: Positive (but still dropping)

Block Volume: Neutral

GEX: Positive

GDX Summary: GDX buyers told me to hold their beer didn't they when I said that resistance would hold it in place right now. This is intermediate term bullish for sure. Still about 5 FVGs below price now, so the pending pull back (it will happen but from which price level I am not sure) will tell us a lot more about the intermediate to long term price...but today was a win for the bulls in the long run.

THE END.

0 views

Sign Up for Exclusive Trading Tips, Tools and More

DISCLAIMER: This site and all prepared documents are for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) voliswell.com is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently. voliswell.com does not purport to and does not, in any fashion, provide tax, accounting, actuarial, record keeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and the material presented herein. You may not rely on the material contained herein. voliswell.com shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this website or it’s documentation may be reproduced in any manner, in whole or in part, without the written permission of voliswell.com except for your internal use. This material is being provided to you at no cost.

© 2020 VOLisWELL