Markets overall are in turmoil. SPY/SPX making new monthly lows everyday. In the midst of all the selling there is something else going unnoticed. That is the divergences forming in various areas. Now, it is not a guarantee that market is done selling and it will be straight up next week. But it is interesting that if things were so bad out there, we shouldn't be seeing some of the things that we are seeing at the moment.
1. Inverse Vix: putting in a lower high from last week to this week as market selloff intensifies. VIX should be pumping right now, not getting weaker. Inverse vix should be plummeting, not gaining strength.
2. Volume: As prices falling and candles getting bigger, we are not really seeing volume to support it. As price is now at a very strong support area, we need to see extreme volumes to break through the level. If volume keeps getting smaller, that will mean sellers are exhausted. This doesn't mean selling is done. It means, a substantial bounce would be in the making in the coming days.
3. RSI: RSI is remaining on the same level as last week. Seller strength is weakening. This also doesn't mean a reversal, but it means that the floor might not open up just yet.
4. Unrelated, but important; bitcoin and crypto are breaking out. Usually, crypto market initiates the risk on trend.
Now, this $410 area in SPY is very important. Price can fall a little bit more, but this support has been months in the making and market will not just give it up. Next week I am expecting a bounce. Depending on how it looks, I will setup a long or a short position.
1. Inverse Vix: putting in a lower high from last week to this week as market selloff intensifies. VIX should be pumping right now, not getting weaker. Inverse vix should be plummeting, not gaining strength.
2. Volume: As prices falling and candles getting bigger, we are not really seeing volume to support it. As price is now at a very strong support area, we need to see extreme volumes to break through the level. If volume keeps getting smaller, that will mean sellers are exhausted. This doesn't mean selling is done. It means, a substantial bounce would be in the making in the coming days.
3. RSI: RSI is remaining on the same level as last week. Seller strength is weakening. This also doesn't mean a reversal, but it means that the floor might not open up just yet.
4. Unrelated, but important; bitcoin and crypto are breaking out. Usually, crypto market initiates the risk on trend.
Now, this $410 area in SPY is very important. Price can fall a little bit more, but this support has been months in the making and market will not just give it up. Next week I am expecting a bounce. Depending on how it looks, I will setup a long or a short position.
评论:
I see some mistypes. Inverse Vix is putting in a higher low, not lower high. Also RSI is at the same level from beginning of October, not last week. Sorry about any confusion.
