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[tradesurfer]

Seems like the sp500 is forming a H&S pattern that is lining up for a drop down next week with perhaps a VIX spike

 

But for this to work we cannot exceed the price high of yesterday on a closing basis.

 

Remember 21st of August 2015 ?   This mid to end of August seems to have a nasty habit of pulling the rug out from the market.  Everything looks aligned that way this time around as well starting Monday of next week.

 

Ideal short opportunity Friday IMO.

 

The market is exhibiting this CREEPY sideways tendency.  In the 2015 scenario that was going on for a much longer time period.  This time around it has an extended upward slant to it.  But at the end of the day we may get a similar outcome.  

 

The DJIA had the huge gap and run Thursday reminiscent of that paulson rally in 2008.  We should see a full retrace of this and gap fill and then continued down.

[Data]

There's no crash in crude oil as in Q2 2015.  So there's no need for governments to plug budget shortfalls by selling assets via sovereign wealth funds or foreign currency reserves.  The drop in February/March was largely due to the flood of 700 billion dollars in US debt coming to market at once after the debt ceiling agreement.  That won't happen again until late 2019.

 

The demand side will change in Q4 this year and Q1 2019 when the next step in the ECB tapering occurs.  It's not clear what effect it'll have since the EU fiscal deficits have fallen so much due to half the debt being acquired by the ECB and the other half having been refinanced at zero or negative interest rates.  Even 10 billion euro per month QE may cover the fiscal deficit.

Edited by Data, 17 August 2018 - 10:33 AM.