5/13/20 MARKET CLOSE Update - Consolidated Analysis

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

QUICK SUMMARY:


Heating Up:


  • Volatility followed through today and started pre-game warm-ups w/ VIX +6.78% and VXX +8.94%

  • UUP finished up solidly with internals were very strong again and close to breakout +0.26%

  • TLT held the pivot line today and looks to be trying to form bottom +0.90%

  • SPY firmly moving down intra-day again today with a close down -1.56%

  • QQQ tested the MSL today and closed below it down -0.95%

  • IWM was down hard again intra-day but did finish off the lows and closed -3.13%

  • SOXX closed red after a strong down day (w/ all intra-day action again) -1.57%

  • FAANGs mixed today but all are looking wobbly here with big selling underneath

  • HYG -0.20% down on the day and in danger of breaking the range down

  • XLF -2.68% down on the day and past 10 days are down pretty heavy


Several comments that are of importance from me after last two days:

  1. Everything that has happened the last 2 days has happened IN REGULAR TRADING HOURS. That means that institutions (not pajama ES traders) made their sell side decisions in the days session which helps paint a real picture of price discovery and real dealer level positioning (finally). This applies to the selling that has taken place in FAANGs, tech, and the buying that has taken place in VIX/VX/VXX space. NO FVGs here...this is all clean action. That is noteworthy and the 2950 level is now distribution zone until it isn't.

  2. The dollar $USD looks very dangerous here. This is on top of VIX. This is not something that will go away...and there has been targeted $USD selling in FX that I have noticed to try to stymie the buying. Nope. Bounces immediately and more blocks on our tracking in $UUP. Who knows what we don't here?

  3. VIX/VXX put in serious moves with follow through last two days. That doesn't mean they won't retrace, but if the $USD is hot and we have selling watch this for intra-day spikes that are pulsing forcing shorts to really cover - which has not happened yet (they are still short thinking this was a corrective move).

  4. Absolute Breadth put in a big giant bullish candle today on our chart. This is not confirmed yet, but if this turns up momentum too, along with the above listed in the next few days, we could see dangerous situation.

  5. We have OPEX on Friday which means we could see some window dressing between here and there so we have to account for that.

  6. The action yesterday and today was clean. No overnight gaps that left anything to sort through. This is a first in almost 2 months. This is a good thing as it allows free flowing price discovery at a pivotal time.

  7. Banks look bad on the charts, but worst on the books. They are already nearing retest lower. Will BTFD crowd step in once more on these? I am not sure, but that is out there as well.

I wanted to bullet point this as we are finally getting clean action. This is also a very dicey setup here with unknown unknowns that appear to be resolved by accumulating $USD. My instincts (not quantitative here) are that getting too cute with zigs and zags here may not be the strategy. Also, we have been trained for 8 weeks now that there will be one more high or one more distribution point. Yes, there absolutely can be. But in this environment with serious unknowns there doesn't HAVE to be.


So going forward, watch VOLs for retrace/consolidation next two days. Watch absolute breadth reading into the week close out. Watch the OPEX and watch the banks reaction to next support layer. All are key in the days ahead. I will try to be more in tuned with my twitter acct during the day when I can as things are starting to get fluid (which is good! for trading). More details below.

SECTORS:

Sector Takeways: All red today except for gold and silver and US bonds.

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: Bullish

Internals: Neutral

Block Volume: Positive

GEX: Positive


VIX/VXX Summary: Follow through today for the VOLs space. We hit the first 40.00 level in VXX that you can see has some negative gamma and stopped for now (it was left behind FVG that formed a resistance when first tested). But looking at the GEX above, you can see that we have positive strikes below. Should impact the depth of the pull back (IF) but I suspect there is some at least consolidation here in VX/VXX/VIX next day/two into OPEX. Above 41 there is nothing on VXX until 46. VIX is very clean too...no gaps (neither actually) so this is free flow here. Let's stay in tuned with this.

INTERNALS


TRIN:

Takeaway: Bearish except for IWM. Starting to see some dip buyers step up into that. Everything else steady negative.


ADVANCERS/DECLINERS:

Takeaway: All bearish pacman pattern eating bulls again today.


NYSE ADVANCERS/DECLINERS:

Takeaway: Approaching the first support for NYSE AD. This is serious move down so far. Bearish trend in place as well.


CUMULATIVE VOLUME:

Takeaway: Big follow through today for volume. This is now hunting for some support but momentum = bearish trend for now.


ABSOLUTE BREADTH:

Takeaway: MONITOR. Big big big bar today for AB. This was firmly in neutral at the open and intra-day change was 10% up. That is notable. Looking for momentum to turn up here and for this wedge to break. Until then, we need to be patient and monitor.


MCCLELLAN OSCILLATOR:

Takeaway: Blew through neutral today. Bounce attempt from here is the assumption...but we have to see if that materializes. If it does, what does that bounce look like will be important.


INTERNALS Summary: These are very negative readings. Not over done either. Momentum has plenty of room to the downside and the wedge on the AB is scary to me - those types of wedges blow out when broken. We are still a little bit away from that, but maybe we aren't. These are all intra-day moves to so these prints are REAL prints, not impacted by chasing at the open...market structure impacts here I am getting the feeling but we will only know in hindsight.

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Neutral

Block Volume: Negative

GEX: Neutral

Put/Call Ratio: Neutral/Bearish


SPY Summary: Follow through today with a 3% down move from high to low today. This is bearish action. Momentum is bearish, P/C ratio is neutral so no fear yet, and GEX is negative. and we are quite a ways away from flip. 287 to the upside is a target (for a bounce if that is next step) or 274.47 is next level down that HAS to hold for bulls or there is something else going on here.

QQQ: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


QQQ Summary: FAANGs were mixed today but QQQ was down hard intra-day. Not everything lined up yet on QQQ but starting to look concerning here. The MSL is at risk of being lost in the next few days. 215.35 is the next support. Then nothing until 202. So this could escalate quickly if it something is unknown here. We are building a VIX for the core indexes that I should have next week...that should be helpful moving forward. I will share it in here with the PCs for each.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Neutral

Block Volume: Negative

GEX: Negative


SOXX Summary: We have been monitoring this as it is a key driver to the broad market the last few years. This had a 4% high to low drop today on serious volume. Notable and second day in a row. We did see a bounce into the close but there are no FVGs above so this is all clean action. Getting the feeling that this is STR environment/regime starting to form. We will keep this on watch.

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Neutral

Internals: Neutral

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Excessive Call Buying


DIA Summary: Dow Jones range expansion was downside. 231.29 needs to hold. Upside resistance is 236.56. Below 231.29 there is a little support at 226.-227 that will not hold and the real support is at 213.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Neutral

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


IWM Summary: Starting to range find to the downside now. Nothing saying this is done. Support is at 117.23 and initial resistance is 123.48 where we visited and was rejected from AH. Below 117.23 is 112 (will offer a little support) but first FVG magnet is 104.73. Those are large ranges which is another reason this could get out of control if it starts to snowball.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative


XLF Summary: This is in negative land and next support is 19.86. Below that is 19.50 area (which wouldn't hold) as the FVG magnet is between 17.54-17.97. That is the primary target if 19.86 doesn't hold. I would not be surprised to see 'value investors' step in at 19.86 which would make no difference because there is a hard ceiling there now at 21.15.

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: HEAVY Negative


HYG Summary: All bearish. 77.07 is FVG that will fill. Bulls want that to hold. Below that is a little support at 75.50 and then next real magnet that will get hit at 73.57. We will see how it goes on the way there. Still range bound for now.

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Neutral

Internals: Neutral

Block Volume: Negative

GEX: Positive


TLT Summary: Trying to find a bottom. I am still not sold but positive price action thus far. Get momentum to turn back up tomorrow and I will be a buyer again in the long term account.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Heavy Positive

GEX: Positive


UUP Summary: Bullish AF. Resistance line in the sand is 27.26. Support range is 26.63 below. So we wait. This has been brewing and been accumulated for some time. I get the feeling that this will be a case study at some point. About what? I have no idea but I think we are all about to find out.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Positive

GEX: Positive


GLD Summary: I can hear Austin Powers in the background right now..."I LOVE GOOOOLLLDDD"...lmao. Fucking gold is just honey badger bullish right now. Chart has everything on it. Margin call selling is the only thing that can stop this at this point. There are FVGs notated below if that happens for your reference.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive


SLV Summary: I would love nothing more than for this to rip that 15.54 level to shreds. That is all I have to say. I am not long - I currently have no position. Barring margin selling it might. If we get margin selling, the FVGs are listed below.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Positive


GDX Summary: Price struggling up here. It is traded as an equity so broad market can have natural effects on this. I am agnostic here short term. The FVGs are below if it breaks. The upside is enormous from here if it materializes (hard to believe that but over 35 and through 40 it will be magnetized up to 70-80 because of FVGs in reverse left behind from 2011-2013 massacre). How does this play out? Your guess is as good as mine.

THE END.


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