Pre Market comments sent out to subscribers this morning:
Indexes are lower this morning with DIA -.16% SPY -.37% QQQ -.69% and IWM -.14%
Although I am not quite certain about the IWM reading
Vix.x is +6.93% @cl +2.53% and TLT -.25%
We have reached the point where crude, and TLT does not provide the guidance it typically does in premarket evaluations
For instance, crude being positive is typically good for the markets until it starts getting high, when overall it becomes a drag
Same is true for TLT,
We are almost there now
Not quite yet
But close enough to make a note of it
That shift typically occurs when policy creates uncertainty, and that is where we are at now. Uncertainty is probably a kind word:)
The 15 min EMA charts tell an interesting picture an hour before the open. We had a gap up in the VIX, Now a pullback to the 20 EMA with all indexes except NQ breaking out over the 20 EMA. The thing to watch is whether we get a gap fill on the vix and of course if we get a solid breakout to the downside of the vix and 20 day EMA
With NQ lagging, it is hard to imagine any kind of rally today
The 60 min EMA charts show the index breakouts to the upside in their infancy right now. While the vix has not touched the 20 ema. So they portend a much more cautious view if you are considering a long trade today.
If you are trading using these two charts what you want to use is first the 60 min chart. Then if warranted drop down to the 15 min for the entry signal. As long as the vix stays above the 20 ema on the 60 min chart you should be looking for short signals on the 15 min charts. And vice versa
There are additional things you can add to the charts, but why make them more complicated:)
For those that have been following these posts the correlation between the movement of the vix intraday and the markets is unmistakable
How you incorporate that into an intra day trading system is more complicated then it sounds
We can get into that another time
The QQQ/SPY chart is solidly in sell territory. Remember virtually all of the market gains in the past have occurred when this chart has been in buy mode. Otherwise, it has been sideways to down
That is quite a statement:) But feel free to look it up. Let me say it again. Historically virtually all of the market gains occurred when this chart was in buy mode!!!
So right now, as I see it this alone shows a headwind if you are trading long
The 3 mo vix is on the bounce and that is a good sign. Combined with the QQQ/SPY it tells me that we are looking at more of a sideways move rather than a breakdown. But this is a short-term evaluation. Not medium term, not long term
Last week our 3 short put sales were easy winners for a $220.00 gain. Not the $1000+ we were getting months ago, but still, I will take it
In addition, I picked up $225 on my M2kZ21 trade last week, and another $400+ on my overnight SPY trade
In the works we have HEAR puts that expire this week. That is looking like a590.00 gain as long as it can stay above the strike price of 27.00. It is trading premarket as I type at 30.12. So we have a 10% cushion on this one heading into expiration.
6:00 PM Fed’s Evans Speech
Monday's economic calendar 2:00 PM Fed's Evans Speech
That’s it, just a Fed head giving us his wisdom around 3:00 PST.
Again my view is this should not be allowed
They need to go back to the meetings, the announcement and the press conference after the conference and that is it
Especially in light of the insider trading that is going on at the Fed
The biggest problem I can see right now , aside from the multitude of others, is the vaccine mandate fallout
The eagerness of the media, and big companies to carry water for the government is astonishing and is taking its toll
Now you have pilots walking out, you have almost 200,000 military that are refusing to take the vaccine, thousands of hospital workers being fired or quitting because of the vaccine mandate.
So what does the government do? They triple down on the mandate ready to roll out vaccinating young children
In addition, the rhetoric out of DC keeps getting worse. It has become the government vs the citizenry. Considering they are elected officials, that is quite a catch 22 for the citizens
One other concerning factor is the number of cargo ships that are not allowed to port in the US
My only question is why?
And at this point I do not have the answer, but the ramifications of this are going to be monumental if it continues. It will put the housing crisis look like nothing if they do not correct this
The only positive I see at the moment is the Fed monetary policy. They are actually increasing their asset buys.
They talk tightening while they provide much more liquidity
On the other hand, you have Yellen wanting to monitor all transactions of Americans over 600.00 and increase the budget of the IRS by at least double
Talk about a chilling effect on the economy when this is rolled out
As a trader right now all you can do is think about trading short term
long term trading is something that should be put to the side right now
That is my view, and of course many will disagree
And a caveat, things are never as bad as they appear
I hate to be so negative, but I just call it as I see it. And again, I have no undeveloped ego to massage, I have no particular ideology except perhaps as a traditional Libertarian, I dislike the establishment equally on both sides, and I seek apolitical journalism for my information sources.
If you are a thinking person, that is what you should strive for. If you ever make the transition from a media junkie to independent apolitical journalism, you will stare in disbelief all the garbage you are given 24/7 that is untrue.
If you are a trader, it is imperative to make that transition. You cannot effectively trade when your views are shaped by the media.
Of course it is easier said than done:)
Lets see what today brings.
good luck trading today