Watch Out! Another New Low In Market Volatility

Welcome back everyone!  There are a couple extremely important things going on right now.

I keep telling you guys about why I am willing to go short just as fast as long on the S&P.  This is a very unusual cycle that we are in.  I wanted to share the differences between the common and un-normal cycles.

The DAX is right at key resistance, the NASDAQ is struggling at the IRB from a couple days ago, right now we closed in around the IRB on the DOW, failed to break through yesterday’s high on the RUSSELL.  The RUSSELL outperformed, just to fall back to key support.  The S&P is right back to key support.  If we start failing through those supports you could possibly see the market sell off.  Some of the markets were poised for that in the first place.  The DOW is the only one hanging on a bit stronger.  There is negative divergences and volatility.

We hit a new low today with the volatility putting us closer.  We are within spitting distance of the 2016 low at this point.  The 2006 low was right around 8.60 before the big reversal.  Right now today we got to 8.84 area.  We are just very close to that previous level.  You guys can see what happens.  I noticed that every time the market gets nervous it starts falling pretty hard fast.  Most of the time it has been a V spike recovery off of those lows.  This is causing me to have this strategy where I am focused on both sides of the fence.

When we are above my speed lines I normally won’t look for a short.  Right now, with the VIX like this, I am taking every opportunity I can to find sell signals to short.  I am not there quite yet on a swing trade basis.  We might have some great opportunities for extended falls.  We have to look at the statistics.  We can’t ignore the dates involved here.  It has been more than 10 years since we have been down that low.  Here is the scary part.  When was the last time we were that low before that?  I can go all the way back to 1991 and not see that kind of volatility low.  This is it!  We all know what happened into 2007 and 2008.  A lot of people saw their 401Ks turn into 301Ks.  I don’t want to frighten anyone.  I want to make everyone aware.

A lot of people said stay the course while the DOW dropped 1200 and down.  That is when the market finally start to reverse and go back up.  Unfortunately a lot of people lost a lot of wealth in the process.  We are right back to those lows.  You just can’t ignore the numbers and be prepared.  I will continue to talk about some different opportunities.  I will be doing everything that I can live in the trading room to take advantage of this as well.

You guys have a great night and keep this in mind.  Start thinking about your portfolios and how any sort of downturn can potentially affect them.  Think about whether you are in a position to take a deep impact.  Remember to consult your Registered Financial Representative and your risk trading plan first.  I will look forward to seeing you tomorrow morning or in the nightly videos.

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