6/10/20 MARKET CLOSE Update - Consolidated Analysis

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

PRIMARY MARKET REGIME CURRENTLY IN PLACE:


EQUITY NIRVANA

What this means: Robots/OTFs/Pensions are buying the dip until they aren't. Don't fight it until it breaks regime.


When could this flip regimes: $3110 SPX is the primary (larger GEX flip as of Wednesday close at 415PM) and $3145 is the warning shot.


I am super short on time today with some outside factors pressing me so this is going to be a shotgun post (just charts for most part on limited time I had so couldn't get to all the options data)...back to regularly scheduled programming tomorrow but I wanted to at least get my thoughts out there post FOMC.

TODAY'S ACTION:


VIX and VXX waiting in the grass... VIX 0.00% and VXX -0.31%

  • UUP still waiting to bottom -0.50%

  • TLT seems to be charging forward now +1.48%

  • SPY stalled out today post FOMC but should have been way worse -0.56%

  • QQQ new ATH...again +1.20%

  • IWM blown out -2.72%

  • SMH looks toppy +0.51%

  • FAANGs almost all GREEN

  • HYG -0.14% hitting the big wall

  • XLF a down day? WTF is that? Closed -3.74%


Ok so where are we today based on the weekend game plan:

  • COVID19 cases - RAPIDLY AND UNCONTROLLABLY INCREASING all the sudden

  • US/China relations - ESCALATION. Pence made a statement after hours about playing hardball via trade.

  • $USD - LOWER

  • Bonds (TLT) - UP

  • VOLS (especially 60+ days out) - FLAT

  • GEX levels on a pull back/correction (IF one materializes) - TURNED DOWN TODAY

FOMC came and went. Initial winners are PMs, Bonds, and short dollars. VIX was muted but jumped late in the day from being down. Indexes are very toppy/very heavy here. OPEX is still out there next week so I am leery to be committing to a top. The internals are awful and collapsing and look like this was a blow off. Has to prove itself in tomorrows RTH session imo. That is what we need to watch for...if it can make it there.


I will warn you - this is a pent up chock full of bullshit market filled with really belligerent and obnoxious money sloshing around. If this rolls hard it may blow out faster than you can imagine...I say this because the rush to the exit of large lots knowing COVID is coming up the six now for Round 2, corporate bankruptcies, China issues plus the election jitters could make this a race for the door with those big blocks...not saying it will happen that way just saying it can happen that way.


Remember large lot orders can wipe weeks/months of small lots orders off the board in this equity nirvana and doom loop alternating regimes in A COUPLE SESSIONS. Robinhood is NOTHING BUT SMALL LOTS. Etrade is PRIMARLY SMALL LOTS. ToS is PRIMARLY SMALL LOTS. Remember markets are ruled by physics. So large lots rule them. Period. They have stayed out of the way lately and/or were buyers at the bottom. So did we just see large lots BUY HERE or did large lots LIQUIDATE AND SELL HERE...


That is the regime change question ... hopefully we will find out soon. I have my suspicions.

VOLATILITY:


VIX: Chart with Detailed Levels

VXX: Chart with Detailed Levels

VIX/VXX Summary: VOLs raised across the board especially in the longer terms today. This is notable...this is following the danger script we presented this weekend. We need to see the RTH session tomorrow for more clues. GEX not shown here but still negative for VXX and the internals still below zero. Need them to get up and over before I get bullish VOL. We need VOL buying (which could kick start short vol covering)...not there right now yet.

INTERNALS


TRIN:

Takeaway: Mixed today but distribution was apparent again


ADVANCERS/DECLINERS:

Takeaway: Lots of selling again


200 DMA:

Takeaway: This looks like a failure spike and die and momentum is rolling.


NYSE ADVANCERS/DECLINERS:

Takeaway: Was that it? Making me wonder if this was a flash in the pan right now...


CUMULATIVE VOLUME:

Takeaway: Looks kind of like a blow off setup...and today more reinforcement of that idea...weekly close critical now.


ABSOLUTE BREADTH:

Takeaway: Pulling back... definitely supporting price advancement lately...


MCCLELLAN OSCILLATOR:

Takeaway: In a bear move now...maybe we watch this for a bounce play if we are transforming regimes...


INTERNALS Summary: Fugly...bulls better get to work quick and fix these for the weekly close or this could get bad fast. Last two days are nasty.

INDEXES:


SPY: Chart with Detailed Levels

SPY Summary: HEAVY. Could be done here.

QQQ: Chart with Detailed Levels

QQQ Summary: QQQ is insane...large volume today. Was that it? RTH tomorrow critical.

SMH: Chart with Detailed Levels

SMH Summary: Looked soft...now looks weak. Think this is done and ready for orange line test.

DIA: Chart with Detailed Levels

DIA Summary: Dow Jones didn't make it through to fill that gap? Wow...that is major if that breakaway gap DOES NOT FILL. We need to watch this. Could be gnarly drop.

IWM: Chart with Detailed Levels


IWM Summary: Told you 150ish area was major volume point of control. Bounces are shorts now and if this breaks bull bear and blue line its dead. Let's take it one day at a time.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

XLF Summary: Took profits on my short and then hit it again. I call this the ATM trade. Bull bear pivot broke and in TROUBLE with momentum at such a high level on 5% down day. I feel ZERO sympathy for banks.

HYG: Chart with Detailed Levels

HYG Summary: Short candidate ... yeah yeah FED yeah ... look at the second and third frame. This is the titanic here folks. Better get on one of those first boats.


TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels


TLT Summary: Bottoming for sure now. May retest FVG left behind but its a buy there imo at this point.

UUP: Chart with Detailed Levels

UUP Summary: Initial FOMC reaction is to dump this. Think that is wrong. I am not sure when it bottoms but it is closer now that FOMC has cleared and it wasn't thrown out the window. We will reassess if this loses the 25.75 level. GEX still really positive.

GLD: Chart with Detailed Levels

GLD Summary: Cranking...momentum could take it to new highs if that is what is happening here.

SLV: Chart with Detailed Levels

SLV Summary: Oh man...volume is pushing here and wants to take out 17.31 - can it get it done? I think so...

GDX: Chart with Detailed Levels

GDX Summary: Boom. Was a buy today...not sure if it gets to 40.00 but setup is there if it wants it and had corrected 20%~ from highs so by all means run GDX run as fast as you can before $USD becomes a prob.

THE END.



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