$SPY the beginning of a covid style selloff? 20-32% drop?
It is finally time for a larger selloff to happen. As you can see, we've broken down out of a rising wedge and many people are calling for another scenario to buy the dip, but this dip doesn't look the same as all of the other dips.
To me, this looks more like the start of a larger selloff. My thesis is that this selloff will be a cross between the selloff that took place in 1989 and covid. I think we're about to see a 20-32% drop that comes very quickly not giving people time to get out.
The past two days we're already trading exactly like we did in covid, where we can see sharp rallies that are met with more selling.
The reason this selloff is different is because volatility is starting to react and I have strong buy signals on the weekly timeframe while I'm getting weekly sell signals on SPY.
While my base case was that we'd only get a 20% selloff down to the $550-560 area on the chart, I won't rule out the possibility of the market selling off to the next support level down at $468-$481.
The selling should get stronger once we're under the $666-672 level and volatility will start to rise quickly. Under the $650 level should be lights out for the market.
Again, I think this selloff is going to happen very quickly over the next few weeks, so I'd be cautious buying any dips.
Let's see how it plays out.
To me, this looks more like the start of a larger selloff. My thesis is that this selloff will be a cross between the selloff that took place in 1989 and covid. I think we're about to see a 20-32% drop that comes very quickly not giving people time to get out.
The past two days we're already trading exactly like we did in covid, where we can see sharp rallies that are met with more selling.
The reason this selloff is different is because volatility is starting to react and I have strong buy signals on the weekly timeframe while I'm getting weekly sell signals on SPY.
While my base case was that we'd only get a 20% selloff down to the $550-560 area on the chart, I won't rule out the possibility of the market selling off to the next support level down at $468-$481.
The selling should get stronger once we're under the $666-672 level and volatility will start to rise quickly. Under the $650 level should be lights out for the market.
Again, I think this selloff is going to happen very quickly over the next few weeks, so I'd be cautious buying any dips.
Let's see how it plays out.
Nota
Got the reversal right where it mattered. Vix spiking now. Let's see if it plays out from here.Dagangan aktif
Closing below $689.50 should trigger the larger selloff. Bought some puts on top of my volatility calls.Nota
Took a small position in $540P for 2/27Nota
Looking like we should get the close below $689.50 today which should open the doors for this moveNota
Taking down levels day by day. Next big level of importance is $666-672, below that and we should see vol start to spike. Below $650 and things get very very ugly.Nota
Pivot day today. We'll have to see what happens over the coming weeks here. Charts still look like we should see a lot more selling, I just have no clue what the catalyst will be for a move like this to play out but still think it's likely.Obviously there are geopolitical tensions with Iran that could potentially play out. The dollar is bid again while people are max short. Carry trade unwind is a risk. Lots of potential things that could bring the market down. Again, under $672 should see accelerated selling.
Nota
Looking like we're going to squeeze higher before a larger selloff. TBD on how high.Nota
Welp, only a one day squeeze back to down only.Nota
Close under $672 today and we should see the start of the larger move.Nota
Getting under important levels today, again if we close under 672-666 that creates the conditions for the larger move down.Nota
Closed right at the $666 level. We shall see what happens over the coming days. I don't think we go straight down to the targets as of now, I think what's more likely is we get a move to $606-584 first, then we bounce potentially back into the resistances before seeing the final leg down.But I can't predict the exact path, that's just where the weekly bollinger band sits, so it would make sense that we bounce off that level instead of going straight through it all the way down. If that happens, vix should spike to $45-60 and then come down before a final move higher.
Nota
Sold out of my puts today, think we get a bounce and then the full move happens in AprilNota
Alright, today might've been the end of the short term move now that we've tested $660. Think we can see a rally over the next two weeks, but if we do, you'll want to sell it as it should be the final rally before the large move.Nota
Bought calls at open for 4/2Nota
Starting to entertain the idea of breaking the highs before we see the lows get taken out. If we do, resistance is at 703 and 716.Those would be great entries into puts. I'm staying out of the short side until vixperation and want to see how price action shapes up over the coming days.
Nota
So far so good. New highs it is. Targets above are my final targets.Starting to scale into May and June UVIX calls while also keeping my longs.
This chart is the better guide for upside targets:
Nota
Upside target hit today. Just like on the downside it's possible to overshoot, but I'm taking my positioning to max UVIX calls over the next few days.
Penafian
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Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.