ES Journal - 2023/2024
- Thread starter Buy1Sell2
- Start date
You're on pre-holiday mood, right?
So are many other people.
We've had talks of removing a presidential candidate weeks before his nomination by an internal insurrection, an assassination attempt on the other, the nomination of a "let's start a (trade) war with China" VP candidate, all this while not one, but two wars go on in Europe and the Middle East... and the market has fallen how much?
IMHO, what we're seeing is people who are having a very, very, very good year taking some profits off the table before they go on holiday.
ASML didn't even miss expectations, it just offered lower guidance coming forward (a reasonable, responsible move, in my view).
We're overbought, holidays are coming, cut rates are taking longer than expected...
In short, in my view, this is still a bull market. Just not the forgiving "add to losers, no problem" instant V, come get your free money madness of last year.
We might drop some more, go sideways, bounce to all time new highs... who knows, but I don't think it's time to panick or that this is 2000 all over again.
And FWIW, I think that the AI rally has legs and will be compounded at some point in the next couple of years with some breakthrough in biotechnology .
Now feel free to fade me and cash in
Best trading/holiday to all
I posted a chart on the 10th from a newsletter that caters to options spread traders that showed that the market was in its longest period without a -2% day in the SPX since volmageddon in 2018 which was before my time as a trader.
This was posted on the 16th of this week, which basically concluded that vol couldn't go any lower without a reset, which I took to mean an increase in volatility from the current levels.
I don't understand any of how this is derived. That's why I now day trade futures and I don't put on complex option spread positions. What I do understand of this does seem somewhat useful in terms of being prepared for a market where it is now safe to sell the rip from time to time instead of just buying the dip.
It also suggests that looking for reasons for why the market is selling down here may be a futile exercise. To the extent that the options market now has an outsize effect on stocks and other derivatives, one might look no further than the math behind the options market requiring increased volatility at this exact time in order to keep making the math work.
This was posted on the 16th of this week, which basically concluded that vol couldn't go any lower without a reset, which I took to mean an increase in volatility from the current levels.
I don't understand any of how this is derived. That's why I now day trade futures and I don't put on complex option spread positions. What I do understand of this does seem somewhat useful in terms of being prepared for a market where it is now safe to sell the rip from time to time instead of just buying the dip.
It also suggests that looking for reasons for why the market is selling down here may be a futile exercise. To the extent that the options market now has an outsize effect on stocks and other derivatives, one might look no further than the math behind the options market requiring increased volatility at this exact time in order to keep making the math work.
Apologize to the V, you heretic!
Just kidding, peace
No worries here are my thoughts for next week:
You have to assume next week at some-point there will be a $10 run in QQQ from low to top minimum. Could be as high as $15 move like we saw in April. How that sets up nobody knows. It could be from 468-478 or does it go straight to 485. We had that perfect red candle on the weekly chart. Last week's doji was correct.
it doesn't like leaving weekly gaps. So if there is a gap down on Monday, huge buy the dip near the 468 gap. If it gaps up this could easily have a nice Monday/tuesday run before potentially going down later in the week.
This upcoming weekly candle will reveal a lot. Of course most are hoping that it just magically engulfs the drop last week with a V (which it's done so many times). I don't think that's the case this time. The key will again be how it fades the rally after we get the free $10-15 up move. The hardest part is where that will occur.
Man, you sound weird. What ya been smoking lately? It doesn't sound like the same V-man we're used to hearing.
Anyway, I agree there will be a retracement, but I wouldn't expect too much. As with all bull market tops, it will simply fizzle out with a double-top. Then we can all sing merrily to the tune, "Mama, I'm coming home!"
Buy the Sunday Open and pray.
