7/24/20: MARKET CLOSE & WEEKEND 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:


LIMBO

What this means: We are in a 'technically' in a negative GEX environment. Dealers should sell the dip and buy the rip (required to balance the delta exposure) and this will force more volatility into the market creating range expansion.

When could this technically flip regimes: Flip is now 3220 (very close) and above.


**I have the Limbo up b/c we may not be ready just yet for as we have J-Rome on Wednesday...after that...all bets are off.


FRIDAY's ACTION:


VIX and VXX mixed... VIX -0.92% and VXX +0.33%


  • UUP was not bought Friday -0.43%

  • TLT was not bought Friday -0.01%

  • SPY was sold Friday -0.64%

  • QQQ was sold Friday -0.95%

  • IWM was sold Friday -1.47%

  • DIA was sold Friday -0.75%

  • SMH was sold Friday -1.01%

  • FAANGs mixed

  • HYG +0.09% was bought Friday

  • XLF was sold Friday -0.25%


Our 6 main things to keep watching for:

  1. COVID19 cases - New records in cases and deaths seem to occur daily now.

  2. US/China relations - This is rapidly deteriorating.

  3. $USD - CRIME SCENE RED

  4. Long bonds - meh

  5. VOLS (especially 60+ days out) - meh

  6. GEX levels - RED


ECCLES BLDG housing the newly established 'FEDsury' ZOOM CAM:


The reaction when the intern proposed the YCC programmatic roll out coupled with NIRP (negative interest rates) to the FOMC committee...to announce on Wednesday...


The FED really wants more Fiscal stimulus from the Treasury. We didn't even have to wait until next week for that. The announcement came today (Sunday AM) that we are getting another package proposed tomorrow including more payments (one-time from what I am seeing and maybe some UI expansion) and an eviction moratorium extension (which is pretty significant).


The US/China situation is deteriorating by the day now. Tit-for-tat is not just consulate for consulate, it goes far deeper than that. That will be a macro post in a couple weeks that I am preparing. For now, this should be monitored daily and one has to assume that this is going to result in a hot-war at some point unless there is a significant breakthrough of cooler heads, but the animus between the two world powers is steadily bubbling over into proven acts of violence...which is what leads to real war. If there was a VIX measuring the relationship tensions, it would be well into the 50's+ here imo...and rising.


This week is a major earnings week with Thursday being a monster day. FED on tap for Wednesday with FOMC announcement. There is not a lot of fear represented in the VOLs right here for the SPY, but there is fear in QQQ. There is a little fear creeping up in Small Caps and DJI. I saw a lot of commentary showing impending breakdowns in the indexes so you know that means that there is a at least another up move to shake that sentiment out.


I am of the opinion that we should know a lot more about the mid-term picture by this time next week. But there is just too much action between now and Friday that could create range expansion in both directions...flipping multiple times this week between regimes in this area could be very likely until it breaks one way or another.


All the usual is below and of note I included the weekly perspective views for Precious Metals...and I have included GBTC (Bitcoin Trust) as that is beginning to look quite interesting also. Inflation argument continues to get stronger and stronger by the day (and really the stagflation argument at that). If that persists, I will do a deep review of what that looks like from a macro perspective in August.

WINNERS:

Sector Takeways: Precious metals and emerging markets...


LOSERS:

Sector Takeways: All US equities AND the US dollar were red...hmmm...that is new.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Negative

Block Volume: Negative

GEX: Negative

VIX/VXX Summary: VIX and VXX both just meandering...this is why I am a little hesitant ahead of the FOMC...let's see what these do in/around the FOMC.

INTERNALS


TRIN:

Takeaway: 3 bulls and 1 nasty bear.


ADVANCERS/DECLINERS:

Takeaway: All red.


200 DMA:

Takeaway: That really nasty setup is back...


NYSE ADVANCERS/DECLINERS:

Takeaway: It also shows up here...


CUMULATIVE VOLUME:

Takeaway: And here....


ABSOLUTE BREADTH:

Takeaway: But this is neutral.


MCCLELLAN OSCILLATOR:

Takeaway: Weak.


INTERNALS Summary: That very nasty setup of lower highs in NYSE AD, Cumulative Volume, 200DMAs, and even McOs is clear and present now...same that appeared back in February. BUT there are 2 trading days before FOMC - which is more important than anything POTUS comments on these days. NIRP is out there...as is YCC. So these readings and setups could completely confirm by this time next week and we could be in full blown doom loop OR they could be torched. All things being equal in trading and auctions...they should confirm. BUT if the FOMC is not playing around and go full YCC these will get torched. Next week tells us a lot. To put it another way:


Bears by next week this time if no NIRP and no YCC and bad earnings just giving it to bulls:

Bears by next week this time if NIRP or YCC or great earnings or Fiscal Intervention or some combination of all:

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Neutral

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: SPY VOL Term Structure


SPY Summary: SPY dropping but still too controlled. No reason to front run this into FOMC. 3230-3240 is a great spot to see if this is going to roll over if you want to short. But VOLs showing limited to no fear right here so be cautious of eight ball, corner pocket from J-Rome...

QQQ: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: QQQ Volatility Term Structure

QQQ Summary: This is running ahead of the rest of the indexes now but could see a bounce early in the week...doesn't have to but could.

SMH: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Negative

GEX: Positive

SMH Summary: Just lots of support underneath this unless it breaks $130 level. Under there would be in trouble - anywhere above that could keep getting dip bought.

DIA: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Neutral

Block Volume: Neutral

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: DIA Volatility Term Structure


DIA Summary: FVG above is a ways away and the VPOC is right here at price. VOLS are creeping up.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Bearish

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: IWM Volatility Term Structure


IWM Summary: Gone literally no where in last 60 days.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Positive

XLF Summary: 25.08 please.

HYG: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Negative

HYG Summary: Robo-buying. $85-86 is decade long resistance. Highly inflationary if that is finally busted to the upside.


TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Bullish

Block Volume: Negative

GEX: Positive

TLT Summary: Pull backs are buys now based on the $165 breakout. Nothing changed.

UUP: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Neutral

Block Volume: Negative

GEX: Negative

UUP Summary: Showed the weekly view this week - it is approaching the VPOC on the weekly. This is a pretty powerful level. We now have a negative GEX too so the entire infrastructure is sitting on top of the $USD - easy money trade is the perception across the board - which means it is in the late stages of sentiment. $25 level in UUP is key. Below that and this would have to be re-analyzed, all things being equal.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Positive

GEX: Positive

GLD Summary: Hunting new price action on ATHs is likely. As I have said, the only thing that derails this is margin calls. So if we don't have that...this will keep cranking.

SLV: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive

Block Volume: Neutral

GEX: Positive

SLV Summary: Picture of the weekly chart is worth a thousand words. You can see where we are headed with this. Nothing about this is bearish. We can have scary drops here, but they will get bought with GEX like this. Long term players go on vacation, short term players use scary dips to get positions...and there will be scary dips.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Neutral

Block Volume: Positive

GEX: Positive

GDX Summary: Approaching next weekly FVG level - the speed with which this is happening is directly correlated with the lack of volume profile (to the right). No volume means nothing to fight price going higher. There is nothing above the red FVG fwiw...price should find some resistance there...if none, then that is another feather for inflation. You can see why I said $30 was support. The move from there is confirming.

GBTC: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Neutral

Block Volume: Neutral

GEX: Positive


GBTC Summary: This has the look I love. VPOC is under price and there is no volume once the upper levels are pierced to put a heavy stop to a rally should it form. This is worth monitoring going forward because if it gets above the VPOC then it can run hot up to $15.

THE END.



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