5/20/20 MARKET CLOSE Update - Consolidated Analysis

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

QUICK SUMMARY:


Volatility was running away from the FED holographic killing machines like Catness in today's episode of the Hunger Markets...closed w/ VIX -8.32% and VXX -6.47%

  • UUP finished red but rallied on the ground hog same time same place overnight smacking closing inside the box and off support -0.33%

  • TLT base building and closed positive again +0.30%

  • SPY with the overnight ramp do nothing in RTH pattern closing up +1.70%

  • QQQ with the overnight ramp do nothing in RTH pattern closing up +2.00%

  • IWM with the overnight ramp do nothing in RTH pattern closing up +3.03%

  • SOXX with the overnight ramp do nothing in RTH pattern closing up +3.68%

  • FAANGs with the overnight ramp do nothing in RTH pattern closing up

  • HYG +1.06% no follow through and wasted a bullish momentum setup and now at risk again.

  • XLF with the overnight ramp do nothing in RTH pattern closing up +2.22%

TLT building a base for move up. USD is working on bottoming out. VIX is bracing for the head chopping attempt at the 25.00 level that is surely to be coming Thur/Fri.


My giphy up top is funny not funny because that is what the markets are at the moment... same same... but diffffeeeeeerrrrennnttt.... but still the same.

  • Overnight ramp in ES futures on thin volume to force the derivatives (ETFS, Options, etc) to auto-adjust pre-market/RTH open higher

  • FED Speakers, readings from the Book of the Fed (minutes), Testimony, more FED scheduling of speeches

  • No price discovery in RTH either direction

  • USD buying

  • TLT buying

  • Gold buying

  • Attempted VIX intraday muggings

This is what we have ... for now. Got many DMs today by ppl asking if I was still holding onto my bearish bent. I am not really bearish. I am pragmatic and agnostic. I have pulled myself up in life from humble/hard working beginnings by embracing capitalism, learning to think in probabilities/mathematics and ultimately learning to distrust liars - no matter what they look and sound like. This is the greatest game of Liar's Poker right here I have ever seen in my years on this earth. That is saying something.


Either life dynamics and economics are forever changed and the markets are now public utilities as Ben Hunt thinks they are (RE they will not be allowed to go down or fail for fear of public disruption) OR you believe in physics and math over humans. Put me in the latter bucket (as mathematically I find it more probable that human [FED] hubris is not as capable/effective as nature's unpredicatable hammer). Having chosen nature's unpredictability over man, I get to have a stop loss on this choice...as that is just prudent risk managment.


If you are not blown out (like that short NG futures/options fund in Tampa last year) on this move up, then why wouldn't you be bearish here (at the least for a 'pull back'). We have shorted at the 2960 level a few weeks ago and here we are again. We haven't changed our mind and will add more at 3050-3100 (IF we were to get there) as that was the original game plan so why change now? We are long USD as we said we would be this week on weakness. We are getting longer 20 yr paper and we are starting to begin speculating with VIX (but not too much yet - but that could change should we see something change).


All that being said, I expect the FED circle jerk to extend through this week to try for that VIX < 25.00 level. This coincides with the tests shaping up below in Cumulative Volume and NYSE AD for lower highs while the indexes set higher highs for the move.


So expect...Liar's Poker...Fed Style...for the remainder of the week.

SECTORS:

Sector Takeways: Overnight futures ramp, couple FED quacking ducks, and some readings from the book of the FED (meeting minutes) and everyone gets a green sector - just like Oprah (oh...meant Jerome) would want.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Bullish/Neutral

Momentum: Bearish

Internals: Bearish

Block Volume: Positive

GEX: Negative/Neutral


VIX/VXX Summary: VIX expiration. They took it literally and tried to expire them I guess. Ugly day but when you get shot in your bed every night...it's hard to wake up in the AM lol. That is what VIX looks like here. All jokes aside, this is still not looking too bad. I guess they will test the 25 VIX level again maybe tomorrow or Friday (but maybe it doesn't get there). This is all getting wound pretty tight in conjunction with the $USD. We will see how it shakes out. Sustained break of 25 would be notable and relevant. FED is going to try.

INTERNALS


TRIN:

Takeaway: Neutral readings with a bearish bent into the close. But not really relevant with AD and Cumulative Volume with momentum running hot at the moment. This will be really good for you all to use when you have the app in your hand (phone) or when you are at your PC because it is a good read mid-day/intra-day on entries/exits. We also will allow you to open it up to any ETF...not just these 4. Same with Advance Decline.


ADVANCERS/DECLINERS:

Takeaway: All bulls eating up those bears...can't be much left to eat up though.


NYSE ADVANCERS/DECLINERS:

Takeaway: Setup is there. We will see what happens when momentum exhausts.


CUMULATIVE VOLUME:

Takeaway: Setup is there. We will see what happens when momentum exhausts.


ABSOLUTE BREADTH:

Takeaway: MONITOR. Hmmmmm...no other comments.


MCCLELLAN OSCILLATOR:

Takeaway: Running up to the higher end. Get your Air Jordan's this time please McOs...rare air level awaiting. I mean with the 'Last Dance' documentary and everything it would be fitting.


INTERNALS Summary: Internals look to confirm the lower high divergence scenarios I mentioned on Thursday or Friday. AB is looking like it wants to break the wedge this week or first of next week. We need to see what these look like tomorrow/Friday. If they bust the lower high divergence, then we have something else on our hands. If they confirm it you will know what to do...

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Negative

GEX: Positive

Put/Call Ratio: Neutral

SPY Summary: Bulls want to test 300.99? Sure why not. 306 is still out there too. Over 300 and hedge fund shorts have to cover all ES futures contracts in mass (another overnight futures induced short squeeze or do we wait for Breakfast with Jerome tomorrow AM)? Oh no...I am serious - Powell is televised tomorrow morning again for the 'FED Listens - A COVID-19 event'...you literally cannot make this bullshit up. We definitely need to make a drinking game for daily FED speakers. I will work on a board game design (mobile app?) with the team next few weeks...j/k

QQQ: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Bending towars Excessive Call Buying

QQQ Summary: I denoted what I think is going to play out here. I give this the benefit of being neutral (could become bullish) if it holds that box on a 'pull back'...but with all the FVGs left behind we will hit that box. Magnets up are efficient and effective. So are magnets down.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Neutral

Internals: Neutral

Block Volume: Negative

GEX: Negative

SOXX Summary: Ha. SOXX played me like a fool yesterday! Will switch this to SMH symbol next week or so (more options depth for the GEX reading for everyone). FVG upside will get filled for sure at this point but look at all that selling underneath here in blocks every day. Bull markets are made of this kind of selling...said no one ever.

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

DIA Summary: Dow Jones has selling every day underneath in block size like clockwork. GEX is meh (although a thin options market on this) and it is now in ultra-resistance area. We will find out more in the next few days/week.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

IWM Summary: Look at the spike down in the PC today almost too the insanity call buying levels. These folks will get punished if we just get a 'garden variety pull back' as CNBC states. This is getting to the top end of the resistance range in every respect now. Patient bears will be licking their chops if this pokes up near the MSL as even that 'correction' could be vicious (if we are in fact starting a new bull market...).

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Negative

XLF Summary: Bounce back today and looking to flip the near term GEX tomorrow. Would be bullish short term (couple days if it happens). Long term banks are dead meat.

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Negative

HYG Summary: Nice move as we suggested yesterday. Right back into the box. Now what?

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Neutral

Internals: Neutral

Block Volume: Neutral

GEX: Neutral/Negative

TLT Summary: I added more to this today and will keep adding. We have built a healthy position down here. Look at the red trend line that has been acting as support for entire 2020 ytd. GEX is neutral to us and blocks are starting to turn. Setup for a push much higher is our perspective.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Heavy Positive

GEX: Positive

UUP Summary: Price bounced off the support again in the lower range of the box. Block buying is still massive. DX was bought hard off the lows. Momentum in the reset area. Next week will be a different story in equities, VOLs, and currencies is what I am seeing. Why I don't know, but that is what appears to be setting up.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Negative

GEX: Positive

GLD Summary: Really starting to have harder and harder time making upside progress. Moves are waning. Meat of this move is done. Can continue to oscillate up to white line, but on borrowed time now.

SLV: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive

SLV Summary: Starting to show some basic signs of weakness but still think this tags 17.31 before this move finishes. Too many FOMO chasers now...and look at how many gaps are below...all will get filled.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Neutral (pending x-over)

Internals: Positive (dropping)

Block Volume: Positive (dropping)

GEX: Positive

GDX Summary: Look at the chart and then look at the GEX. First time I am seeing negative gamma strikes with declining money flows and velocity as well as momentum x-over pending. We are in the range where this will be challenged by 10 year resistance. Trade is close to taking a breather. Position yourself accordingly.

THE END.


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