Nasdaq NQ - Bad News for Bears. But First, Bad News for Bulls
Updated
After observing recent price action in addition to the sentiment in trading communities and Twitter, I've been doing some hard thinking about the notion that we are now in a bear market.
All the fundamentals say that there's such and such skyrocketing debt, food crisis, inflation, energy crisis, Europe crisis, currency crisis. And all of these fundamentals are true.
And yet, most fundamentally, although the U.S. equities markets have retraced heavily since 2022 began, they are not in a bear market. Just look at Nasdaq on the monthly. This is not a bear market.
Frankly, I went looking for an example of a bear market in both Bitcoin
and WTI Crude
And found that both of their monstrous retraces were simply natural results of their having gone parabolic in the first place.
Never forget that it's a Law of the Cosmos that for every loss there is a gain, for each positive, there is a negative, and that when something reaches an extreme, it will reverse.
If you don't believe it, just pick something up and throw it in the air and watch what happens. Nothing can stop the result of the action.
The way traders treat a "bear market" is about as absurd as if humans were to treat the rising of the sun in the morning as if it were the VERY BEST THING THAT COULD EVER HAPPEN and the night like the END OF THE WORLD.
Thousands of years ago when man was still primal and had no idea what was going on, perhaps they felt exactly that way.
What we mean by a "bear market" really refers to a phase of time where traders are no longer able to mash buy on AAPL or TSLA at the top and make 3% per day without it even dipping.
What we mean by a "bear market" is a phase in time where highs get melted down and new lows keep getting made, and that's really where we are and have been all year.
And that's why nobody is happy. Seek and destroy markets are hard to trade.
What I am getting at with all these words, is we are still in a bull market. We are just in the night time of the bull market. Several fundamental conditions have not been met for this world's economic heart to have entered either a recession or depression.
The Fed has quietly been printing money and propping up the banks since 2019. These Central Bank Central Government bailouts are now the norm, rather than the exception, because humanity is in trouble.
And so, what I would like to say, is that we are very, very close to the point where being short is going to cost you your portfolio. We're not going to make new monthly lows. August wasn't the top.
But we're also at a phase where going long is likewise going to cost you your portfolio.
In my most recent SPX ES call, we were able to anticipate both the areas the MMs would retrace to and the upside areas they would take out, and both of those have been achieved:
SPX / ES - Bull Whips and Bear Saws
However, as the price action unfolded in the week and I thought more and more about what was going on, I felt unsettled with the notion that JPowell's speaking was going to lead to a dump, and so I made a revised call on Nasdaq NQ
Nasdaq NQ - 8 Days & 1,700 Points
The problem I still feel in my guts about the above call is that although it's going up, and fast, and at the time I predicted, it's unsettlingly curious that the Lords of Wall Street were benevolent enough to let all the longs have such an easy time of it and not sweep out that July 18 pivot, despite coming so close, before we go on a 2,000+ point winning streak.
That's just, not how they do things, man.
Frankly the time we spent under 12,200 was also just simply too brief and too easy.
And so, all of this leads me to today's call. Previously in August, I had anticipated that a 72 VIX is set to print, and I would imagine this would come when the June lows are taken out.
VIX - 9x8 = 72
And while I thoroughly believe this is still in the cards, I now believe that we don't see this until late in the year or into 2023.
Fundamentally, I believe the issue is that the Democratic Socialists of America Party require the stock markets to be happy ahead of and during the U.S. October Midterm Elections, because much of their voting base is teachers, unions, and old people, all of which have heavy investments in funds and pension plans that are neck deep long on everything establishment.
And yet I also believe that we won't go up so easily, since fear is still yet to come.
Looking at the weekly, I believe we have two critical inflection points.
I believe that 15,500 is in the cards before 2022 is out, but we have unfinished business lower before that happens. It's like dancing, two steps forward, one step back. One step forward, two steps back. Never just forward, forward, forward, or back, back, back.
Trendlines are about as scientific as looking up your horoscope on Yahoo, but people still do it, believe in it, and follow it, and so it is something that is simply going to be attacked. If you do it right, you can take advantage of the opportunities presented by not being the first mouse to go for the cheese.
Price action on the daily shows that Friday's moon candle not only created a gap, but already took out all September highs and has already rebalanced a big August gap.
What lies below, however, is our very solid and very crucial trendline, which also happens to correspond with a lot of wicks from June and July.
Wicks are notable because they represent places of low volume trading.
What I believe lies ahead is a case where we will quickly and violently descend towards the 11,650 range, test the trend line, break the trendline, and fill in all that volume in the wicks.
To me, one of the biggest tells is that AAPL, which leads the Nasdaq, was actually _very_ bearish last week. Even on Friday, it was bearish.
To me, this says it wants to continue to make new lows, which means everything else is going to make new lows.
I believe that during September FOMC, the Fed will do something like a 50 bps hike instead of a 75 bps hike and/or revise their inflation target to 3% from 2%, and that will cause the markets to moon back towards 15,000. The Bank of Japan, which meets more or less the same day, will maintain Yield Curve Control on the 10Y Bond at 0.25% despite the annihilation of the Yen, which means the old money parade into U.S. equities will continue, and we will get a September FOMC melt up, not a melt down.
Note that there is not another FOMC until November.
We're not in a bear market. The June low was the low until at least the end of the year. After you see Apple post $198, let's see what happens in terms of VIX 72 and a bear market.
No matter how bad things get, social stability is the Communist Party's number one priority. Ultimately, they need the United States to be fat and complacent and not revolt in order to maintain their power.
They need to maintain their power to install Central Bank Digital Currencies, digital ID, and social credit across the globe.
To do that, they need the U.S. equities market to keep delivering "the happy," to keep serving as a distraction, and to continue to give you something to gamble away your life savings on, so that your eyes are focused on everything besides what is important to your fundamental life.
Marxist-Leninist rogues rule the world at present, but only for a little while longer. In the interim, if you trade against them, they will hurt you.
So have some fun going long on TSLA and AAPL for now. Just make sure you take profits instead of thinking you caught the new paradigm.
It will still take a few more months for Justice and Conscience to return to the surface of this world.
In the meantime, WTI and Natural Gas are going to dump.
WTI Crude / CL - An Intervention: Saving Blind Bulls
&
Natural Gas / NG - What, Truly, Is a Bull?
And when all is said and done, where you want to have your money is in defense contractors and energy companies.
Boeing BA - A Dark Harbour
Good luck, and stay safe. The future is bright. But you have to fjord the river Jiang first.
All the fundamentals say that there's such and such skyrocketing debt, food crisis, inflation, energy crisis, Europe crisis, currency crisis. And all of these fundamentals are true.
And yet, most fundamentally, although the U.S. equities markets have retraced heavily since 2022 began, they are not in a bear market. Just look at Nasdaq on the monthly. This is not a bear market.
Frankly, I went looking for an example of a bear market in both Bitcoin
and WTI Crude
And found that both of their monstrous retraces were simply natural results of their having gone parabolic in the first place.
Never forget that it's a Law of the Cosmos that for every loss there is a gain, for each positive, there is a negative, and that when something reaches an extreme, it will reverse.
If you don't believe it, just pick something up and throw it in the air and watch what happens. Nothing can stop the result of the action.
The way traders treat a "bear market" is about as absurd as if humans were to treat the rising of the sun in the morning as if it were the VERY BEST THING THAT COULD EVER HAPPEN and the night like the END OF THE WORLD.
Thousands of years ago when man was still primal and had no idea what was going on, perhaps they felt exactly that way.
What we mean by a "bear market" really refers to a phase of time where traders are no longer able to mash buy on AAPL or TSLA at the top and make 3% per day without it even dipping.
What we mean by a "bear market" is a phase in time where highs get melted down and new lows keep getting made, and that's really where we are and have been all year.
And that's why nobody is happy. Seek and destroy markets are hard to trade.
What I am getting at with all these words, is we are still in a bull market. We are just in the night time of the bull market. Several fundamental conditions have not been met for this world's economic heart to have entered either a recession or depression.
The Fed has quietly been printing money and propping up the banks since 2019. These Central Bank Central Government bailouts are now the norm, rather than the exception, because humanity is in trouble.
And so, what I would like to say, is that we are very, very close to the point where being short is going to cost you your portfolio. We're not going to make new monthly lows. August wasn't the top.
But we're also at a phase where going long is likewise going to cost you your portfolio.
In my most recent SPX ES call, we were able to anticipate both the areas the MMs would retrace to and the upside areas they would take out, and both of those have been achieved:
SPX / ES - Bull Whips and Bear Saws
However, as the price action unfolded in the week and I thought more and more about what was going on, I felt unsettled with the notion that JPowell's speaking was going to lead to a dump, and so I made a revised call on Nasdaq NQ
Nasdaq NQ - 8 Days & 1,700 Points
The problem I still feel in my guts about the above call is that although it's going up, and fast, and at the time I predicted, it's unsettlingly curious that the Lords of Wall Street were benevolent enough to let all the longs have such an easy time of it and not sweep out that July 18 pivot, despite coming so close, before we go on a 2,000+ point winning streak.
That's just, not how they do things, man.
Frankly the time we spent under 12,200 was also just simply too brief and too easy.
And so, all of this leads me to today's call. Previously in August, I had anticipated that a 72 VIX is set to print, and I would imagine this would come when the June lows are taken out.
VIX - 9x8 = 72
And while I thoroughly believe this is still in the cards, I now believe that we don't see this until late in the year or into 2023.
Fundamentally, I believe the issue is that the Democratic Socialists of America Party require the stock markets to be happy ahead of and during the U.S. October Midterm Elections, because much of their voting base is teachers, unions, and old people, all of which have heavy investments in funds and pension plans that are neck deep long on everything establishment.
And yet I also believe that we won't go up so easily, since fear is still yet to come.
Looking at the weekly, I believe we have two critical inflection points.
I believe that 15,500 is in the cards before 2022 is out, but we have unfinished business lower before that happens. It's like dancing, two steps forward, one step back. One step forward, two steps back. Never just forward, forward, forward, or back, back, back.
Trendlines are about as scientific as looking up your horoscope on Yahoo, but people still do it, believe in it, and follow it, and so it is something that is simply going to be attacked. If you do it right, you can take advantage of the opportunities presented by not being the first mouse to go for the cheese.
Price action on the daily shows that Friday's moon candle not only created a gap, but already took out all September highs and has already rebalanced a big August gap.
What lies below, however, is our very solid and very crucial trendline, which also happens to correspond with a lot of wicks from June and July.
Wicks are notable because they represent places of low volume trading.
What I believe lies ahead is a case where we will quickly and violently descend towards the 11,650 range, test the trend line, break the trendline, and fill in all that volume in the wicks.
To me, one of the biggest tells is that AAPL, which leads the Nasdaq, was actually _very_ bearish last week. Even on Friday, it was bearish.
To me, this says it wants to continue to make new lows, which means everything else is going to make new lows.
I believe that during September FOMC, the Fed will do something like a 50 bps hike instead of a 75 bps hike and/or revise their inflation target to 3% from 2%, and that will cause the markets to moon back towards 15,000. The Bank of Japan, which meets more or less the same day, will maintain Yield Curve Control on the 10Y Bond at 0.25% despite the annihilation of the Yen, which means the old money parade into U.S. equities will continue, and we will get a September FOMC melt up, not a melt down.
Note that there is not another FOMC until November.
We're not in a bear market. The June low was the low until at least the end of the year. After you see Apple post $198, let's see what happens in terms of VIX 72 and a bear market.
No matter how bad things get, social stability is the Communist Party's number one priority. Ultimately, they need the United States to be fat and complacent and not revolt in order to maintain their power.
They need to maintain their power to install Central Bank Digital Currencies, digital ID, and social credit across the globe.
To do that, they need the U.S. equities market to keep delivering "the happy," to keep serving as a distraction, and to continue to give you something to gamble away your life savings on, so that your eyes are focused on everything besides what is important to your fundamental life.
Marxist-Leninist rogues rule the world at present, but only for a little while longer. In the interim, if you trade against them, they will hurt you.
So have some fun going long on TSLA and AAPL for now. Just make sure you take profits instead of thinking you caught the new paradigm.
It will still take a few more months for Justice and Conscience to return to the surface of this world.
In the meantime, WTI and Natural Gas are going to dump.
WTI Crude / CL - An Intervention: Saving Blind Bulls
&
Natural Gas / NG - What, Truly, Is a Bull?
And when all is said and done, where you want to have your money is in defense contractors and energy companies.
Boeing BA - A Dark Harbour
Good luck, and stay safe. The future is bright. But you have to fjord the river Jiang first.
Note
VIX is up while Nasdaq and SPX are also up. This has not happened in a long time:It's especially notable on account of VIX spending all of Friday's moon mission filling a gap.
Imminent sharp drop downwards definitely possible. But they may wait until tomorrow.
Note
The standing narrative is more or less "It's so bullish because CPI is going to come in soft (7 handle~) and that means the Fed will ease during FOMC, so more moon."Frankly speaking, I think CPI is almost certain to come in soft. And it does mean the Fed is likely to 50 bps or even ease/revise inflation.
But the more it is true that the Fed will ease/dove, the more likely it is that you'll see a large amount of dumping heading into FOMC.
Buy low, sell high.
Sell low, buy back higher.
Note
What the Wall Street Lords giveth to bulls, they taketh away.For now.
Careful. This huge momentum breaker is not likely to gap-fill-and-reverse up.
There's three more days of big economic calendar events ahead this week, and FOMC next week.
Note
If you're trading puts or short, be careful. You could see an exceptional bounce between now and tomorrow before it takes the next ride down.Note
This is set up to be a COVID dumpster-style monster retrace tomorrow, killing bears and trapping more bulls.Consider the equilibrium of the total range is almost the close of the 15m CPI dump candle and that equilibrium of the dump candle itself is a 600 point faceripper.
Looking at SPX, the low of the dump candle is almost exactly range equilibrium
Need more evidence? Consider that VIX, again, wicked 28 before closing, and a 28 VIX is already strangely low for the worst dump day in two years.
It wicked the highs and and killed short sellers before the Sept. 6 bounce too
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.