SPX500 / ES1 - Saved by the Bell
Updated
It is somewhat ironic that an eight minute Powell speech in front of a wood panel wall with a variety of vacuous, yet "hawkish," narratives is the catalyst for the market to begin to rightly seek new lows. Perhaps if they had hiked rates 200 bps we would have seen a 4,600 SPX print "because reasons."
I've heard some say that the currency of central bankers is credibility, yet the Federal Reserve double talks, back tracks, and goes against its word all the time. They truly are market manipulators, and they truly lack credibility.
Regardless, last week's SPX call was a sharp success, and price action shows that the bear market rally is likely finished. At least, if irrational mania is to continue, deeper lows ought to be sought first, and I believe we will see that imminently this week.
This week is a tough forecast because Monday-Wednesday are August and Thursday and Friday are September, with the following Monday already being the week of September 5 to 9.
BTC has lost the $20,000 marker and Ethereum has slipped under $1,500 already, and I believe we will see an even deeper dump on Sunday, which will cause their futures market to gap down, and it isn't going to fill.
Since there is a correlation between the SPX and digital currencies, I believe that the indices will gap down as well, and SPX will seek lows under 4,000 and stocks will simply be a train wreck.
We may quickly see a 30 VIX print, and many things will be startling.
However, because Thursday and Friday are September's open, I really expect to see a healthy, albeit somewhat anemic bounce that will create a bull trap.
If not, then the monthly candle will print something awkwardly like it is sitting at the moment, which doesn't make a lot of sense:
What I ultimately want to say is that if you got stuck long at the top on equities, you should have a chance to mitigate your losses, but you should not expect that gap formed last week at ~4,227 to fill. Even less should you expect returns to highs. New highs are simply out of the question.
You aren't likely to get out even if you got ahead of yourself. So cut your losses and mitigate your risk.
If 4,227 was going to fill, they would have filled it during the Jackson Hole manipulation before the slaughter.
Ultimately, we're still trading at a premium when measuring the overall run from June lows to August highs. The makers ought to have mercy on you by only driving to a discount for a day or two before monthly close.
What comes in September, in my opinion, is the beginning of a descent below June lows. Fear will finally be employed. The Terminator algo will come with ferocity and break bull hearts, take out the pre-COVID high, and mark a significant change in market structure and sentiment.
And then things will get interesting, because we have September futures expiry and September FOMC all within days of each other, and at the end of the month.
Note that there is no FOMC in October, and note the U.S. midterm elections are also in October.
You're going to hear the propaganda machine squawk a lot about recession this and fundamentals that as price crashes. You'll be encouraged to sell low, pay a lot of premium for puts, get short, and then, well... the market manipulators are the market manipulators, after all...
This paradigm will not last forever. The world is in trouble, and the Chinese Communist Party will soon vanish overnight, with the world wondering how it could happen.
The only hope for "stability" is mankind's return to tradition. What's important right now isn't making money, but it's how you position your heart and your mind amid the situations you find yourself in.
Strengthen your soul's consciousness, strengthen your will, and stand fast to your kindness and rationality. That is the way to make it through.
Trading brings out a lot of fear, and a lot of greed in a person. Work first on eliminating those attachments. When they're gone, you'll find yourself on level water and under the auspices of the Blue Dome of Heaven.
I've heard some say that the currency of central bankers is credibility, yet the Federal Reserve double talks, back tracks, and goes against its word all the time. They truly are market manipulators, and they truly lack credibility.
Regardless, last week's SPX call was a sharp success, and price action shows that the bear market rally is likely finished. At least, if irrational mania is to continue, deeper lows ought to be sought first, and I believe we will see that imminently this week.
This week is a tough forecast because Monday-Wednesday are August and Thursday and Friday are September, with the following Monday already being the week of September 5 to 9.
BTC has lost the $20,000 marker and Ethereum has slipped under $1,500 already, and I believe we will see an even deeper dump on Sunday, which will cause their futures market to gap down, and it isn't going to fill.
Since there is a correlation between the SPX and digital currencies, I believe that the indices will gap down as well, and SPX will seek lows under 4,000 and stocks will simply be a train wreck.
We may quickly see a 30 VIX print, and many things will be startling.
However, because Thursday and Friday are September's open, I really expect to see a healthy, albeit somewhat anemic bounce that will create a bull trap.
If not, then the monthly candle will print something awkwardly like it is sitting at the moment, which doesn't make a lot of sense:
What I ultimately want to say is that if you got stuck long at the top on equities, you should have a chance to mitigate your losses, but you should not expect that gap formed last week at ~4,227 to fill. Even less should you expect returns to highs. New highs are simply out of the question.
You aren't likely to get out even if you got ahead of yourself. So cut your losses and mitigate your risk.
If 4,227 was going to fill, they would have filled it during the Jackson Hole manipulation before the slaughter.
Ultimately, we're still trading at a premium when measuring the overall run from June lows to August highs. The makers ought to have mercy on you by only driving to a discount for a day or two before monthly close.
What comes in September, in my opinion, is the beginning of a descent below June lows. Fear will finally be employed. The Terminator algo will come with ferocity and break bull hearts, take out the pre-COVID high, and mark a significant change in market structure and sentiment.
And then things will get interesting, because we have September futures expiry and September FOMC all within days of each other, and at the end of the month.
Note that there is no FOMC in October, and note the U.S. midterm elections are also in October.
You're going to hear the propaganda machine squawk a lot about recession this and fundamentals that as price crashes. You'll be encouraged to sell low, pay a lot of premium for puts, get short, and then, well... the market manipulators are the market manipulators, after all...
This paradigm will not last forever. The world is in trouble, and the Chinese Communist Party will soon vanish overnight, with the world wondering how it could happen.
The only hope for "stability" is mankind's return to tradition. What's important right now isn't making money, but it's how you position your heart and your mind amid the situations you find yourself in.
Strengthen your soul's consciousness, strengthen your will, and stand fast to your kindness and rationality. That is the way to make it through.
Trading brings out a lot of fear, and a lot of greed in a person. Work first on eliminating those attachments. When they're gone, you'll find yourself on level water and under the auspices of the Blue Dome of Heaven.
Note
The fact that it's Tuesday premarket and everything is where it's supposed to be for when the month opens makes me think that September is set to open bloody and be a total bloodbath until late in the month, conveniently around when FOMC is.Non-farm Payroll is Wednesday, last day of the month. Action could be unbelievably explosive between NYSE open Tuesday and all of Wednesday.
Note
Have to say, this supposed setup for a big bounce into 4050+ looks unbelievably bad.Note
It's notable that Monday and Tuesday are Sept. 1 and Sept. 2, and Monday is Labour Day in light of this strange impotency of a monthly candle that has formed and will close in ~15 minutes:Wednesdays are also one of the days that SPY and QQQ options expire. It seems the options MMs like to grind the afternoon session into the dust so as to ruin the time and volatility premium on contracts.
And they sure left a bunch of equal tops behind after a less-than-scary, raid on the lows to close the month:
Seems Thursday/Friday could be a _big_ bull trap and then it's all business coming back from vacation on Sept. 6.
Note
Of course, if you take a look at what WTI Crude did this month, it went down in a straight line on open, left some accessible equal highs behind, created some more on the way down, and took 21 days to lose 12% before finally cleaning everything up, and barely, before dying at the end of the month:Note
There goes both the double tops, on NFP day, after the MMs didn't even bother to manipulate the sellers at the bottom of the overnight channel...Note
Impressive dump raid below the channel at a peculiar time. Very Non-farm Payrolls.And yet, now we have a de facto triple top...
3938 = ???
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