A little bit surprised by the big equity inflows for the past week. You would figure a big shakeout like last week would cause some fund selling, but totally opposite of my expectations. Biggest equity inflow over the past year, from @themarketear.
ETF flows for the past week:
This increases my conviction that SPX 3425 is a hard ceiling and we're likely to go much lower in the coming weeks. But since we got a pullback yesterday, its right in the middle of the short term range of 3310-3425. And I don't have confidence in buying dips, even at the low end of the range, because of the negative catalysts (pension rebalance at end of quarter, lack of buybacks, and election uncertainty). So I will wait for any kind of rally to sell into, anything around 3400 would be good enough to put on shorts, although its looking unlikely to happen.
Nasdaq has been especially weak during the past couple of days, which is another negative sign. The small caps and beaten up sectors are too small to be able to move this market higher. It has to come from tech to be able to move the market big.
Bonds haven't really been able to go up despite the equity weakness the last 2 days. It looks like after effects of a market disappointed in Powell. This whole rally off the March low is based off of big government spending and Fed QE so if neither are beating market expectations, its going to be hard for the market to rally from these lofty levels.
Trump is starting to get desperate, trying to get re-elected, saying that he wants Republicans to agree to higher numbers for the next stimulus package to get a deal with Pelosi and the Democrats. But Senate Republicans are wary of giving in to Democrats and looking bad if Trump ends up losing in November. The closer we get to election day without Trump catching up to Biden in the polls, the more likely Republicans in Congress will distance themselves from Trump.
The wildcard is if Covid fear keeps a lot of Democrats away from voting on election day, and they don't bother going through the hassle of requesting and then filling out mail in ballots. It is clear that Republicans are much more likely to vote in person than Democrats so that is a big advantage for them.
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I'm out. Didn't work out. On to the next
Good move, weak sauce bounce attempt in SPX.
Ok 110 oct 16 calls. Calling bottom
Up is the new down.
MO, if you don't think the market will get to the 3400 range again before falling closer to 3100, why don't you enter a short position now? Is it because there is too much risk of the market climbing to 3400 first and forcing you to sell at a loss?
And earlier this year, you made a great point about the Nasdaq being more overvalued than the S&P, so I'm a little unclear on why you switched to shorting the S&P. Is it because unpredictable (and explosive) tech companies dampen the size of any fall in the Nasdaq?
Reason I waited on the short was because I expected a bigger bounce lasr week and it didn’t happen. After the price action over the past week, probability of a flush out towards 3100-3130 by early Oct. has gotten much greater. So looking on the short side either Wed or Thur. Not full size but perhaps 2/3 size position.
Nasdaq has gone down huge relative to SPX recently so I’d rather just stick with SPX for index shorts now.
Have you ever been in a bull market before when every commentator on the street is saying "that's it. the S&P is going to 3100" or "if the S&P doesn't hold here, it's going to 3100"?
Are they all going to get rich getting into short positions on Thursday or do you think the market will still be range-bound like you were thinking before and everyone predicting the S&P to decline in a straight line will be wrong?
This move is not driven by daytraders, its fund managers reducing risk ahead of contested election fears and also disappointment about new fiscal stimulus. Powell also didnt do any favors yesterday by saying Fed has done all it could and not promising more QE.
I don’t see us going in a straight line down to 3100-3130, but I do expect 3150 before 3350. If I do buy a dip this week, it will be just to try to catch a bounce up to 3280-3300.
SPX got really overextended in August so these levels aren’t super attractive to buy. I would be much more confident buying 3130 for a swing trade so if I buy around 3200 it will be smaller size.
Also, crowd still doesn’t seem super bearish yet but we are slowly getting there.
The market seems to really like you and wants to impress.
You expect the SPX to fall within two days and it falls within one.
You expect the market to climb to 3300 by next Friday and it rallies to it this Friday.
I have a smaller account and am trying to get above $25k. I have one call contract on SPY that I'm holding over the weekend. I'll sell on Monday if the market opens green because I expect a selloff now that we're at the higher end that you predicted, and I only need $100 profit to have the balance necessary to day trade.
Market was quite strong on Friday and 3200 support held up well this week. Probably test the 3320 high hit earlier this week on Monday or Tuesday. Think we are still in a 3220-3320 range for now.
Are you trading at all right now? If not, how can you resist?
SPX has hit a 3360 ceiling for the past two days. Barring anything wild happening in the world, are you now expecting a pullback to the 3200 range this week? If so, it's not appealing enough for you to trade on? I heard a few people talking about a gap down tomorrow because of the GDP release, so I said fine. I'm holding shorts overnight.
I am waiting on shorts. Missed the premium short entry near 3360. If we get another bounce towards that level, will aggressively short. Expecting a pullback towards 3200 or even down to 3130 sometime within next 2 weeks.
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