The Dollar is easing back a little this morning which in theory should be a welcome reprieve for equity bulls. However over in the real world I’m not seeing much of a response except for the Russell 2000, which is a bit disconcerting given last week’s VIX Sell Signal which remains valid until about Wednesday this week.
So I was catching up with the E-Mini campaign this morning and suddenly experienced a bit of an epiphany. Looking at the daily panel I suddenly asked myself ‘what the hell are you doing?’
Now don’t get me wrong, I’m not exactly unhappy regarding the fact that I was able to somehow squeeze out 4R+ in profits since the < 2600 lows early this month. But why do I keep expecting a directional move while we remain trapped in a sideways churn?
I promised you volatility and the market delivered – in spades* I may add. And that’s all I’m seeing right now, random dips and rips but at the same time an equities market that refuses to roll over and die. Until now that is, as a drop below ES 2580 would force longs to start covering all the way into ES 2400. What seems to be keeping things aloft thus far is a shallow volume hole right below yesterday’s spike low near ES 2590.
Just oooking at equities these days is giving me headaches. We haven’t seen ugly tape like this since the big shake out back in late summer of 2015 which ran all the way through Feb/March of 2016. After 20 months of bullish bliss we have now returned back to the murky valley of volatility with all its trappings of a corrective sideways periods: overlapping bars with long wicks, turns on a dime, fast stop runs, reversals followed by reversals, etc. etc. Who can make sense of it all? Well, I think I am just the market mole to do it, so read on.