Fear/Greed Index

Markets are scared, very scared of what the possible outlook shall be in the upcoming months. Will COVID-19 wave 2 hit? Employers and the economy were barely able to sustain the first lockdown initiating stimulus checks, CERB (Canadians), bailouts, reliefs, and even mortgage deferrals. Will Biden win the next presidential election? Trump clearly has stated, if he does not win, the market WILL crash. The current Fear/Greed index shows that investors are at the tipping point where they simply aren’t interested in “buying the dip” anymore.

ES [S&P 500 FUTURES]

First things first, let’s start with the “Story so far”. On the weekly on ES this still for the time being looks like a “healthy pullback”. Market has been going on all cylinders since March, so profit taking is understandable. Needed even. Last week was not a scary drop. Perhaps it could be seen as such if you account for the rally but all in all ES closed barely under the previous week close, and well above the lows. The bull/bear line is still very much intact and should the market go south we see demand at 3190–3217. Now, let’s divert our attention to the hourly.

First and foremost we see demand at the 3300–3307 level that has confluence with trend. Above there is supply at 3330–3335. One of these will most likely hit in the Sunday session and hold its ground. Most importantly there is a trend breakdown from the lows of last week that has for now been preserved. That will for now remain our bull/bear line for intraday/intraweek trading. If ES breaks down under that line and can’t get over we consider shorts. Hold above 3330 we consider longs. COT shows us retail bought the dip on Tuesday and NonComm unfortunately did not. Have not for 3 weeks now. Interesting crossroads.

Last but not least, please remember as we always say. No reason to panic. Plot your levels and play accordingly. This is a very CONTROLLED selloff. There is nothing about this screaming panic. If you cannot contain a selloff such as this one then a real crash will most likely take the shirt off your back. Take a deep breath, relax, plot your levels, and play them. This is nothing.

SPY/QQQ/IWM

We mentioned last week that we saw something brewing behind the scenes with 318p for SPY, 265p for QQQ and 142p for IWM. Well, we’re seeing again 318p for SPY, 142 IWM and 261 QQQ for this week. It seems although we did drop again from the 16th to the 18th, we didn’t drop enough to their liking. We’re anticipating likely a relief bounce to SPX 3343 before the next leg down.

SPY Darkpools: Above: 340.99, 344.49, 348.40; Below: 325.90, 323.96, 311.39

QQQ Darkpools: Above: 272.73, 281.73; Below: N/AIWM Darkpools: Above: 155.53; Below: 151.04, 150.42

ES 1 HOUR CHART
ES DAILY CHART
ES WEEKLYCOT DATA

VIX [CBOE VOLATILITY INDEX FUTURES]

VIX is still very much contained. Ending the day in a doji, and the week red. It is a higher low for nox but if 23.5 breaks and holds as supply on VIX there is really no argument. Still contained within the trading range as pictured in the chart.

VIX FUTURES DAILY CHART
VIX FUTURES WEEKLY CHART

U.S. DOLLAR

Nice squeeze from the bottom on the U.S. Dollar. Still range bound as you can see on the charts. We see some supply above and demand below on the 4 hour chart. 92.2–92.4 is demand on the chart whereas 93.2–93.3 is supply. We will be watching to see where it goes first and whether these levels hold. Ultimately we are looking for the Dollar to break up or down and hold those levels so we can trade it further but the long from the bottom is most definitely working for now.

U.S. DOLLAR 4 HOUR CHART

APPLE [APPL]

A few weeks earlier after AAPL completed the stock split, we were discussing in the server that we anticipated the giant would come down and potentially retest $100 if not lower. Market makers are starting to feel the same way and are pricing to see the Titanic to finally hit that 100 mark. Puts are long from 108.75 to 100 for 9/25 while calls above 105 have all been shorted. The hourly chart looks just as unfavorable when you look at the hourly from 9/02 onwards. With that in mind, AAPL is sitting flush on its 13ema on the weekly chart, if it bounces or collapses, it’ll set the direction for the next few days if not weeks. If AAPL doesn’t hold here at 106.64, it could flush and fill the gap from 100–96 and then down to a potential 85.00 per share.

Darkpools: Above: 126.50, 132.49, 132.60; Below: 93.62

APPL DAILY CHART
APPL ORDER FLOW & HEATMAP

BEYOND MEAT [BYND]

Beyond Meat has been seeing new buyers through last week and survived much of the market sell off. Anticipating the 144–145 area to hold, there is a juicy upside
towards previous highs of 167 area. For this week, 160 strike call options are net long with massive volume and also 190 call strikes are gaining interest. Seeing a small volume of puts for 157.5 being net short, we anticipate bullish activity for this week to continue.

BYND DAILY CHART
BYND ORDER FLOW & HEATMAP

DATADOG [DDOG]

Datadog is testing the 20 and 50 ema levels and holding good so far. Friday was an inside day and anticipating that the large volume sell off was an exhaustion. Options sweep activity is leaning bullish for this week with 85 to 100 call strikes being net long and 93.5 strike puts being net short. There is a potential for this to squeeze back to 52 week highs if the tech sell off cools down overall.

DDOG DAILY CHART

MICRON [MU]

MS is trading at near the bottom of the trending range. Friday close was slightly be- low the 50 ema however, the new tech IPOs in the coming weeks could drive the bank stocks higher through the week. Expecting the 50 area to hold, we also see the Puts are net short at 50 strikes and net long for 53 Call strikes

MU DAILY CHART

NIKOLA [NKLA]

Nikola has been most active stocks for quite some time now and we saw last week that there were plenty of buyers waiting around the 30 area which broke the sell off after negative news reports. Provided, we hold the 30 area support, there is a good upside potential to 46 area. Options activity show that overall puts are being shorte and calls are going long. For this week, 40 strike calls are gaining interest.

NKLA DAILY CHART

SNOWFLAKE INC [SNOW]

Snow was hyped largely due in part to Buffet taking a large stake in the IPO. The stock surged from an initial price of 120 to 240 before it started trading on the open market and on opening day spike to a high of 318.01 before coming right back down to 215.32. Fib retracements and 15min chart analysis shows that if SNOW holds 235–228, it could recover back to 255 followed by 275.78 and then 296.03 if it gets there.

SNOW DAILY CHART

SQUARE [SQ]

In the last report, we anticipated a squeeze to the upside after the hold of 134 sup- port area. With tech being hit the major in the week’s sell off, SQ is in the prime
buyers zone this week. If the 50 EMA hold strong, we could see a push into the resis- tance territory again this week around 157s

SQ DAILY CHART

TESLA [TSLA]

The FOMO continues with Battery Day on 9/22. Starting to get bored of the pump dump hype with TESLA but as a company, we can’t blame Musk for the philanthropist that he is. Sharp pullback it had from hitting all time highs at approximately 2512.45 (502.49) per share coming right back down to 1649.40 (329.88) per share. With the FOMO, it impressively managed to get back to 442.15 and if it continues, could very likely get back to 500 or even more! MM were seen buying 600–750c for this week early last week but have simmered down to longing calls from 440–520. In the event the battery day is a complete bust, they are prepared with 380–360p on the bearish side.

Darkpools: Above: 474, 476.25, 476.70; Below: 367.13, 312.40

TSLA DAILY CHART
TSLA ORDER FLOW & HEATMAP

EXXON MOBIL CORPORATION [XOM]

At the end of the week lot of the energy stocks have been gaining upside momentum. XOM has been sold off quite a bit and anticiapting that 36 area should hold and bring in more buyers through this week. We saw some long term put strikes 30 and 37 are going short with heavy volume. If the energy sector sell off is cooling down, XOM has the potential to run back up to 48 area and a good candidate for long term swing plays at these levels.

XOM DAILY CHART

ZOOM [ZM]

Amazing recovery on Sep 11 after dropping to a low of 413, ZOOM came right back to blow past 420 to hit 441.94! Market makers are really liking the potential with this as they are long 440C to 480C for 9/25. There’s an oddball size of puts down to 415 if the market sells off, so it could be worthwhile to get in ZM on a pullback before chasing it Monday morning.

Darkpools:Above: 457.69; Below: 399.00

ZM DAILY CHART
ZM ORDER FLOW & HEATMAP

INDICATOR OF THE WEEK: Market Breadth

As the title states this is a market breadth indicator. UVOL/DVOL. Are indices trending down? Up? Which ones are doing what? And it’s all displayed in real time in the upper left corner tucked away from the price action. Enjoy.

https://tos.mx/uf42XAg

WEEKLY TRADING TIP: Market Direction Should Be Of No Consequence.

What the title says.

Market direction should be of no consequence to a trader. We aren’t investors. We don’t buy and hold for years. We trade.

Therefore it really does not matter where the market decides to go, you should be going with it. The importance of a plan becomes all the more pronounced when we are talking market direction. There is a reason why we have Over/Under levels and play those. It is as simple as we do not care where the market goes, we just want to hitch a ride.

Toss your bias. It doesn’t matter how much revenue you think AMZN has and where that figure should mathematically land AMZN on the NYSE. We don’t care about that. We only care about whether it’s Over/Under certain levels.

Have trades planned for both directions in whichever stock you are watching. Be your own devil’s advocate. If you think “Oh my, this is demand and it’s going to bounce here” then the next thought that should hit your brain is always “Buuuuuut. If it breaks this on the downside I will be shorting it”.

Bob and weave. Always bob and weave with the market. Don’t stand in the corner waiting to be punched out.

Trading or investing in financial markets in any capacity involves substantial risk. These activities may not be suitable for every investor. All information and content provided for the sole purpose of education and research. Any opinions, analysis, prices, and other information are provided entirely as general market commentary and should not be construed as investment advice.

Written by

Australian lawyer. Living in Asia. Writing about Law, Finance, Wall Street & Startups. Echelon-1.com

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