12 replies to this topic

[tsharp]

FWIW, I have similar thoughts for the SOX and NBI:

 

 

 

 

[orange]

I have two models I'm working with at the moment. One has the market with a small bounce Monday or Tuesday which will eventually see another low. The other has us heading straight down Sunday night. I could be wrong on both, but I don't believe the market will hold a 3rd attempt at the low.

Edited by orange, 13 September 2020 - 02:22 AM.

[flyers&divers]

A gentle reminder,

 

overswing conditions can occur in both directions. Considering how far the indices, specially $NDX, exceeded the averages that may lead to similar excess on the downside.

In fact it happened in March April when - so clearly illustrated by the chart posted by steadyquest - the index quickly dropped 1500 to cross the 200ma and traveled another 1500 to bottom in April.

 

civil war IS a possibility

massive redemptions of retirement funds

robo trading coming home to roost 

Etc...Etc...

 

On the long term price is an expression of value, on shorter term it is a display of emotional conditions. Emotions rule and can get out of control. 

 

On Friday, as $NDX  tested and took out a swing low, index options implied volatility was LOWER then at the swing high on September 2.

That is a screaming example of complacency. 

 

Important downmoves seldom end in complacency, they usually end in near panic or panic conditions.

 

Regards,

F&D