Disclaimer: This newsletter is not financial or investing advice. The information is for education purposes only and reflects only my own operation.
Combine a high VIX @ 35 and CPI data the next day…and you get a wild range day like today. This was very predictable.
SPX held 3964$ level and we pretty much closed unchanged from yesterday’s close. Notice how we quickly tested the 5dma before rejecting it this morning. This ema is very important during a rapid decline and I’ll make sure to stay out of the market while we’re below it.
Not a lot to talk tonight as we’re waiting for the CPI data tomorrow that will really move the market one way or another, depending on the actual print.
We live below all kma’s, meaning it’s a full RISK-OFF environment for me currently. Preserve capital! The goal in these market correction is to be the closest possible to your Equity Curve ATH possible for when market turns, you get to new ATH in days, not months!
Stocks > 200 now low 20’s and > 50 is BELOW 20% @ 14%. We even touched 12% intraday, which is very close to being a VERY EXTREME reading where we had major bottom in the past. We could really continue down, but at some point, being oversold like we begin to see we’ll have to have a good ST rally at least.
McClellan just under -200, we’re getting extended on the downside here.
Eq. P/C ratio decreased today @0.68 (-0.10) and P/C ratio at 1.0 is not yet extreme.
VIX retracted a bit today and now @ 33. If market really in free fall move, we could see VIX spiked around 40/50. I’ll look this one closely tomorrow.
Tomorrow is a big catalyst with the CPI data schedule at 8:30. Which side will be the move? I don’t know… but it will certainly move the market as we’re feeling that participant were waiting for that news today.
2 BIG SECTORS dominated the market today. Biotech & Semi’s. If these 2 can follow through with a good CPI print tomorrow, we can have one hell of a rally of these bottoms.
I like how defensive sectors lagged the market today before CPI.
However, one day is not a trend, we’ll have to see tomorrow if this strength continue or not.
No new positions today. I remain 100% in cash and wait for the market conditions to improve.
Don’t try to play hero and get paper cut trying to guess the bottom and front run a few % on a rally. Not worth it, been there.
New positions:
Trimmed positions:
Closed positions:
Only 2 names in the daily FL tonight. Setups are still rare and we’ll have to see if we get a good reaction to CPI data before committing any capital in this market.
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