7/7/20 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:


LIMBO (w/ NEGATIVE BIAS)

What this means: Didn't have to wait long. 3180 is the level of max inflection and so far has rejected higher prices. In this environment volatility should increase.


When could this technically flip regimes: Nirvana over 3180 with gusto. Doom is now 3115 and below.


We are technically negative GEX right now but being so close to the flip point ($3170) it is still a fresh flip and should be considered unconfirmed - hence the LIMBO rating above. If we follow through the next day or two - doom could be back in town.

TODAY'S ACTION:


VIX and VXX starting to definitively hold their line VIX +5.33% and VXX +3.44%

  • UUP was bought today +0.23%

  • TLT was REALLY bought today +1.41%

  • SPY was sold today -1.03%

  • QQQ was sold today -0.69%

  • IWM was sold today -1.77%

  • SMH was sold today -1.24%

  • FAANGs all RED (except for FB)

  • HYG was sold today -0.66%

  • XLF was sold today -2.05%


J-ROME AND THE MANUCH AT THE CLOSE ZOOM CAM:


J-Rome channeling that inner Gavin today speaking to the team to get them ready for a bout of deflation...

A continued excerpt from the call transcripts of the zoom:


"Remember these words friends as the algos always buy when we say: 'tools', 'facility', 'target inflation' or use 'more' and 'ammo' in the same span of any 4 consecutive words...if I say these in a speech...take a shot of tequila and then click buy on your ES futures screen. We can do this...we make the best of the better places in the world. We can handle what is coming."


Ok, so where are we today based on the macro trends we are tracking:

  • COVID19 cases - Just speaking to Florida...as the news comes to us locally now. TOTAL. DEBACLE. People being turned away from hospitals for a lack of capacity...I really hope the trailing death curve is wrong. If not, I am afraid of what these stats look like in 10-15 days here in the state.

  • US/China relations - "Oh yeah...you want to mess with me...I am gonna turn off that Tik Tok 'thing-a-majiggy'" - quote from Navarro. Bet they are scared now.

  • $USD - Green

  • Bonds (TLT) - Green

  • VOLS (especially 60+ days out) - Warming Up (turned up)

  • GEX levels - Red


Ah Silicon Valley - what a hysterical parody on us developers. Top 5 comedy of all time imo....


Anyways, $318 proved to be important at this juncture. We are not that far from confirmed to be in a doom loop, but the tilt that happened today on no news/events/etc...really a whimper...was notable to me and is how its supposed to work. We hit the level where the sellers of volume hit sell and overwhelm the low volume buyers.


Volatility is completely disregarded right now as if it is gone...TLT is flying and about to break out...the $USD has built a strong base after two attempts in the last 2 weeks to blow it out below...COVID is so out of hand everywhere...and now we have to face the summer of defaults that we have refused to face.


So is the $285 level the fair price for now? $250 level? $225 level? $188 level...IDK. I just know that the game that we are playing here on 'liquidity is all that matters' is fine so long as the liquidity solves the problem at hand. If liquidity is all that matters, we should hit $400 later this year. If liquidity is not a structural solver - which it is not mathematically...we will have to find out what price fair value is at...and these lower levels will have to inform on that as we go.


More wise cracks and GIFs tonight...I got a good night sleep last night.

SECTORS BROAD MARKET:

Sector Takeaways: What am I looking at here? I don't know what this is? Red?


SECTORS BONDS/GOV BONDS:

Sector Takeaways: Great job energy stocks! - as stated last night signs of inflation everywhere...GTFO...how about signs of imagiflation?! That shit is EVERYWHERE.


SECTORS BONDS/SOME COUNTRIES:

Sector Takeaways: James Ultra Bond 20 yr edition was strong.


SECTORS BONDS/SOME COUNTRIES:

Sector Takeaways: Remember our phrase when the dollar is green there is a crime scene...about right...brutalized the world today.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Neutral

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Positive

Block Volume: Neutral

GEX: Negative

VIX/VXX Summary:


VXX pulled some more Jet Li moves today and went from the inside of the mansion, took out a few more guards and is about to head to the front gates ($37 level). If it gets those guards there, bulls are in trouble. We will see what happens.

INTERNALS


TRIN:

Takeaway: What? Bears?! Nah...you can have 1...wait is that the QQQ?


ADVANCERS/DECLINERS:

Takeaway: Red just eating these for lunch. Bears all over this today all the sudden.


200 DMA:

Takeaway: Fumble.


NYSE ADVANCERS/DECLINERS:

Takeaway: Double fumble.


CUMULATIVE VOLUME:

Takeaway: Triple fumble.


ABSOLUTE BREADTH:

Takeaway: Bottoming? Maybe..


MCCLELLAN OSCILLATOR:

Takeaway: Weak - felt weak yesterday.


INTERNALS Summary:


Internals remind me of Richard Hendricks right being very all over the place as they are up yesterday and then today...

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Negative

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: SPY VOL Term Structure


SPY Summary: SPY call buyers talking to me yesterday about what I needed to do in this market as they get it in their Maz and I am standing there in my hoodie:

$318 mattered and now that FVG is filled we should float freely as it appears we are to some state of price discovery. VIX is rising, GEX flipped, and internals are negative. Will it matter? I thought $318 would be telling, and seems that it is looking to be thus far. We will know more as the week progresses.

QQQ: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive

Put/Call Ratio: Neutral

Volatility Metrics: QQQ Volatility Term Structure

QQQ Summary: Bulls of tech after today...talking to bears thinking they have a shot with a red candle..

Bullish until it isn't but this is awfully extended mathematically from everything that can be measured. Now things can always become more extended as humans can be more irrational...but if it turns it will catch up...probably with some velocity. VOL is up here but otherwise still pretty bid.

SMH: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Negative

Block Volume: Positive

GEX: Positive

SMH Summary: Stopped out short yesterday so I was glutton for punishment and came back today even though this is what it has felt like...been getting 'Russed' lately on this one:

Turned over today and so did all the internals? Will it matter? Russ says no way...I say maybe.

DIA: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Negative

Block Volume: Neutral

GEX: Negative

Put/Call Ratio: Excessive Put Buying (skewed though so discount it)

Volatility Metrics: DIA Volatility Term Structure

DIA Summary: Being honest and all:

This is looking weak all the sudden and 30 day vol rising. I had this as a book end to tagging that close upside FVG...now not so sure. Why is everyone so concerned all the sudden?

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: IWM Volatility Term Structure

IWM Summary: Small caps bringing in the big guns to help them through the rough patch ahead. You tell 'em Bighead...

I can just picture these two running an $IWM firm. I have met some that resemble this. They are totally prepared for navigating the next 3-6 months. Like totallllly. Maybe that is why the internals and money flows are collapsing dropping...this is looking heavy here...

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative

XLF Summary: Bank CEOs when asked about the CLO and derivatives accounting and who signed those legal disclaimers for the high yield stuff that is in flames right now about to come to light in the next 30 days (but is currently totally off balance sheet don't worry about it doesn't exist understood?):

So weak cannot even fill simple upside FVGs. Still no position outside of long term duration puts at $12. Yes, you read that right...

HYG: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative

HYG Summary: This is literally what I think about high yield every day...

Really....reallllllly......reallllllly hope the Fedsury knows what they are doing here with this house of toxic trash....

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Positive

GEX: Positive

TLT Summary: Over $167 this is gone. Long.

UUP: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Positive

Block Volume: Negative

GEX: Positive

UUP Summary: Seems to be setting firm footing for something. There is some short squeeze fodder over in the futures markets...$27 has to be busted for this to fly but seems to be setting a strong base to try for it.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Bullish

GEX: Positive

GLD Summary: Gold is money. Everything else is credit. Its acting like it...only one fly in the ointment...you are correct it is money and the best money so if we get a credit default shock and that old braud Marge calls, it's getting handed over at collateral price which is way lower. That is the only concern for gold bugs here.

SLV: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Positive

GEX: Positive

SLV Summary: Can. Not. Get. Through. 17.40.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive

GDX Summary: Will it get to $40? Working on it now that old high is out of the way. To rich for my blood up here though...

THE END

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