12/6 Recap, The Santa Rally Is Put On Hold

These moves are vicious, we wiped out 3 weeks of gains in a 2 days, of course it happened right at the trendline I’ve been pointing out for weeks, but it doesn’t matter how or why, what matters is it played out and all that silly talk of a new bull market can be put to rest. I was getting comments and emails telling me I was being too bearish, on the contrary, I was being honest about what I was seeing in the charts. The risk/reward just wasn’t there and I hope you all were careful with it. I still got punched in the mouth today, but that was more thanks to the EU than the market, but I will get into that later in the recap.

The SPY now looks terrible, we broke the uptrend we were in from October cleanly, now all the moving averages are sloping down and the gap at 380 I noted yesterday now looks like a natural destination . What you will notice on the chart below is the MACD finally went red, it hasn’t done that in a long time, so for now, the trend is bearish on the SPY. The RSI is descively pointing south and that’s it, there is nothing to be bullish about for the moment.

As we look at oil, it is now NEGATIVE on the year. Pretty hard to believe that after the invasion of Ukraine by Russia but it is true. What a breakdown, last week we had those rumors of China reopening and OPEC cuts driving the price higher and now look at it. What a house of horrors. All that nonsense we were told about fundamental shortages was just not true and along the way we had those silly targets from JP Morgan telling us oil was potentially going to $380 on Russia issues. Good call by them.

The VIX continues to perk up and for the umpteenth time, going long equities with a VIX sub 20, did not work out. It’s just one of those things where you hope people grasp the situation and stop doing it, but the desire to go long stocks everyday is strong in the permabulls.

Today’s Unusual Options Action & What Stood Out

Did you see BX,ACRE,ARI today? I know yesterday I mentioned there was some odd action in the puts there, they got pummeled today. What’s funny is yesterday I mentioned selling out of my META bc the candle wasn’t looking so hot and of course today we get the bad news from Europe punishing the stock. It’s just uncanny how these things work. Ok eough rambling, onto the unusual action