Starting to see divergences between an S&P that keeps going lower and a VIX that is not making higher highs as we go lower. Plus you have bonds finally selling off here, which means the fear bid is slowly dissipating and oil is getting closer to a short term bottom. Even though it is irrational, lower oil has scared equity investors who fear some junk bond contagion coming from the oil sector. But lower oil helps just about every other sector, although on a small scale, so net net, it is a positive, not a negative. But the forces of liquidation can control short term price movements. Those in energy names are bleeding, and they are being forced to dump their shares as prices go lower.
I am constructive on ES around 1995, so if there is any intraday weakness today off this gap up, I will be looking to scoop up some equities on the dip. IMO, worst case scenario, ES gets to 1975 to form a short term bottom, and bounce 3%. Best case scenario, it bottoms on a dip today to 1995 and runs back to all time highs by beginning of January.
I do not want to be short here at all. It is just be long, or wait for the right long entry. Being short is out of the question for me.
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