Possible Stock Market Aggressive Sell for the Brave
Stock-Markets / Stock Markets 2016 Sep 23, 2016 - 06:50 AM GMT
SPX made its high at 10:35 am. Although it has not gone higher, it has only taken baby steps lower, so it may not be “out of the woods,” yet. As noted earlier, it has achieved at least one Wave relationship, but has not filled the gap.
I cannot give an “all clear” for conservative investors, since the SPX has not declined back beneath its 50-day Moving Average and the NYSE Hi-Lo Index went considerably higher today. However, those who are aggressive may consider at least a partial position today.
VIX put on the final touches of its decline this afternoon.
ZeroHedge reports, “Short-term volatility expectations plummeted during Wednesday’s post-Federal Reserve meeting stock market rally.
As readers are likely aware, our biggest concern regarding stocks going into September pertained to sentiment. Almost unanimously, investor sentiment metrics had become overly bullish or complacent. And while on an intermediate-term basis (i.e., 6 weeks to several months), these conditions have not sufficiently abated, some of the shorter-term froth was alleviated during the sharp selloff in the past few weeks. In particular, despite the stabilization in stocks, we saw a bit of defensive behavior in the volatility market in the days leading up to yesterday’s highly anticipated Fed meeting. Specifically, traders bid up short-term volatility expectations, especially relative to longer-term expectations. That bid quickly unwound yesterday, however, in the aftermath of the Fed meeting.”
VXX follows a slightly different pattern, having made its final low on September 7. You can see that this corresponds with the low in Wave [B] in VIX. From hare, it appears that they may closely follow one another in their impulsive rallies. The leveraged ETFs made a new low today, so their pattern may be different or delayed.
Regards,
Tony
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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.
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