I didn't listen to him tonight. But I watched the market all day and I can tell you what happened - and what's happening. The market is obviously way overbought. I mean, 666 to 824 in 2 weeks? C'mon. But today, the selling began and was looking to make a big reversal candle. It sold off right to the 50 day MA which I think many that wanted to short it sat back and waited to see what would happen. Well, the dip buyers came in and the shorts scrambled. It was nothing more than a small short squeeze when the 50 held.
But don't be fooled. This current rally is about to fail. Now the talk is that we're at quarter end. The quarter and year began with SPX around 900 with a yearly high of 943. So, the assumption is 'they' are going to try and jam it back there by Tuesday to show quarterly statements 'not so bad' like the 25+% loss in 2008 quarter ending.
That means any upside from here will be strictly manipulated BS. That's why the VIX is NOT going down. Pete Najarian on Fast Money has been screaming it the last two nights. Look at this chart of the VIX:
The market goes up almost 1500 points in 2 weeks and the VIX barely budges? Huh?
The volume on BRCM for example on Monday's late day surge from $20 to $21.50 was incredible. Why? Obviously stop losses for short positions. That's why the bigtime selloff today. There's no more buyers. It was all forced buyers. If there were truly 'real' interest, it wouldn't have sold off the way it did.
Look at the volume on the TNA today. I think it was a record. Why? Short squeeze. Not in the TNA itself but the $RUT as a whole. The shorts sense the end of this. Today they didn't get the SPX selloff on the 50 day break. However, that has been now tested and will be even that much bigger a deal on the next test if broken. If so, 741 is the big target.
If Moe is correct about the wave count, then the selloff will be fast. But that should be a big buy opp. SHORT TERM. I am looking to short TNA $25 PUTS as a bullish play. Shorting the MAY puts.
The goal is to get them short around $11 to $12.
These charts are starting to roll over. However, the SPX futures are now up 7 points, so I think there will be an early morning attempt to jamm the market tomorrow. But that could fail by mid to late day. The true breakdown probably won't be until Friday or Monday. The question is, how much higher here will it go?
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