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Market Top Appears Likely (video)

This video ties in some of the recent charts & analysis that I've recently covered on the US equity markets on various time frames as well as the $VIX volatility index. It appears that should the US stock market move even just a percent or so below where it closed today, that would likely trigger a cascading series of sell signals from the intraday, daily & potentially out to the weekly charts.

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Jul 21, 2016 7:02pm|Categories: Equity Market Analysis|Tags: , , , , , , , , |7 Comments

7 Comments

  1. lee1 July 21, 2016 7:21 pm at 7:21 pm

    Hope we sell off but guessing buyers step back in tomorrow and take us close to 2200 not long from now.

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  2. jameske July 21, 2016 7:34 pm at 7:34 pm

    @rsotc Hi Randy, so what instruments will you be using to play this scenario out? I struggle to find shares to short and I do not short often, I tend to lose more than I make. TZA? SPXS? SQQQ? Or put options on the SPY and IWM etc?

    I do have access to CFDs but I have never had the confidence to try it out, and I do not know anyone else that has ever used them.

    On the short scenario, Gary Savage is expecting a half cycle low in the stock market. And I checked back in early November one of your negative divergences also coincided with his prediction of a daily cycle low. I have not checked them all though. I also note that elliot wave theory usually views wave 5 as negatively divergent, which then leads to some form of correction or period of consolidation.

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    • rsotc July 21, 2016 8:46 pm at 8:46 pm

      jameske – When a decent selloff in the broad markets appears likely, if & when I trade any broad market ETFs in lieu of or in addition to individual stocks, I’ll often opt for the higher beta indices such as the $NDX or $RUT, although there have been instances where the $SPX might stand out because either the charts are more clear (entry & exit levels/support & resistance levels) or it appears that it might have as much or more to rise or fall, based on the charts of SPX along with some of its top sectors.

      With that being said, I’ll share my thoughts in the coming days as to which indices & sectors look most promising on both the long & short side. On a final note, I realize that some traders don’t have access to shorting or at least shorting the 3x ETFs and in most cases, they are better off just sticking with the 1x or possibly the 2x short ETFs such as SDS, QID, TWM, etc.. as the decay on 2x ETF, especially with the broad market tracking ETFs, is minimal when compared to the 3x ETFs, especially those tracking volatile sectors such as the biotechs & miners. I’ll try to provide the best alternative proxies for any upcoming long & short trades on sectors or indexes.

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      • snp July 22, 2016 10:40 am at 10:40 am

        savage is calling for a couple tags of the 10 dma on the way up first, and nasdaq to challenge ath first before the hcl, fyi

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  3. joefriday July 21, 2016 7:50 pm at 7:50 pm

    Really awesome work Randy! Thanks..

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  4. jacant July 21, 2016 10:55 pm at 10:55 pm

    Thanks for Overview Randy!

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  5. TXUTrader July 22, 2016 11:27 am at 11:27 am

    Randy,

    Thanks for the analysis. As I write this at 11:25am on Friday the VIX has pulled back to it’s 5 day moving average (at 12.23). This could be a good area to place short trades with expectation that the VIX bounces up and the 5 day MA turns up.

    With a tight stop this could provide a decent risk reward opportunity.

    Good luck to all.

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