Just time for a quick one tonight.
Wow is all I gotta say. No confirmation on yesterday’s possible reversal formation, that’s for sure. The “possible” was bolded there, too, as today was when the confirmation had to come (and it didn’t).
The chart above is a 10-year of the DIA (Dow Jones Industrial Average ETF), which appears to show a race for the 8000 level. The chart below shows…
…the continuing rise in the VIX. No reversal sign yet.
Now we should start seeing some bottom pickers from earlier this week getting forced out. I closed out half of my “toe-in” trade at a small loss. It’s what you gotta do. I do still hold half of it — maybe bad idea, but it’s a small position with some margin built in (see below). I wonder what Mark Cuban did with his short DIA puts (see his post from yesterday “I’m Going Long“)?
I would be ok with getting the EEMs put to me in November at close to $14 per share (38% below here and 75% off the high) and MSFT at less than $19 per share (15% below here and 49% off the high), but still, as I’ve mentioned before, buying before a confirmation (massive buying comes in) is not good (and should pretty much never been done in large size, if at all). MSFT did out perform the NASDAQ, dropping only 3% vs. 5% for the NASDAQ. The EEM underperformed, as the flight from risk is “game on.”
It’s seeming like my “Eye of the Storm” post was accurate so far. Margin calls are a coming, that’s for sure. Distressed sales are going on and people are raising cash by selling pretty much everything, as evidenced by the summary stats.
UPDATE: Make sure you read my comments in the comment section (below), where I added some links to articles, images, and screenshots. I also presented a trading hypothesis. Cheers!