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YouTube Video:
https://youtu.be/0YO1JZIxxQI
Stocks finished the day lower, which hasn’t happened much recently, in a sudden turn mid-day. There was no good explanation for the sudden turn, but I think if you have been reading me for any length of time, then you know that today was Vix options expiration, and there were a very large amount of negative flows suppressing the VIX the past few days/weeks, and now those are gone.
With flows of December opex and now Vixperation behind, options flows that have supported the market are officially gone. I have little doubt in mind that these flows have driven this final leg of the market higher since the Fed meeting last week. The rest of the already-known move was based on a negative gamma positioning built in October and was violently unwound, which then kicked off systematic flows.
The entire rally has been built with a pile of very loose sand, and again, it wouldn’t surprise me to see us go right back to where we start over the next several weeks at 4,100. The index today peaked at 100% of wave 3, and yes, you can count the rally as a 5-wave structure up, and it is likely completely.
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I don’t want to get too far out in front because we have seen these big intraday reversals a few times during this rally, and they haven’t worked out in marking the top. At least this time, things seem to be in better alignment, given there is a count that works; the VIX is moving higher, and the S&P 500 can’t get more overbought than it has been the last couple of days. So again, if this is some top, it would make sense.
NASDAQ
What is interesting, I thought today, was that the NASDAQ 100 got above the November 2021 intraday high and closing high, as well as yesterday’s highs, and then closed below all three levels. What does it mean? It could mean a few things or could mean nothing. I won’t speculate today, but I will wait and see how it develops. On the surface, it seems like a rejection of the recent highs.
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Meanwhile, we also saw the USDCAD break out today and push higher out of a falling wedge. Perhaps the decline in the USDCAD is finally over, and there appear to have been five waves lower since peaking on November 1.
Anyway, that’s all. There will be more tomorrow.
-Mike
Charts used with the permission of Bloomberg Finance L.P. This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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