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Updates 2:48 PM EST - Tuesday 10/20/20
$VIX $VXN may retest the highs of today, but they are not about to break out. This is actually a bullish setup for $SPX $NDX.
$SPX $NDX up channels are intact, although $SPX $NDX may retest the lows of today. These are strong support levels. So $SPX $NDX should find enough buyers here to resume the rise up in their up channels.
Short-term direction is unresolved, but IWM up channel is still intact. We are staying away from IWM TNA for now, but not testing with TZA either.
In the Signal Trades, we are continuing to hold TQQQ with b/e stops for the different entries. If we get stopped out, we will look to re-enter at lower price. We are holding all TQQQ overnight.
Updates 9:18 AM EST - Tuesday 10/20/20
Futures have stabilized around the lows of Monday 10/19. $SPX $NDX IWM will most likely retest these lows before rising. However, we need to allow for the fact that they may still dip a little further in their green support zones before rising.
Pre-market $VIX and UVXY are forming short-term tops, supporting the rise in $SPX $NDX IWM.
In the Signal Trades, we plan to scale in a bit more TQQQ when $NDX retests its Monday low. However, we don't want to build up a large position just yet. Let's see how the morning unfolds.
Updates 1:43 AM EST - Tuesday 10/20/20
$SPX $NDX IWM up channels are still intact (bullish). However, $SPX $NDX IWM are in a down swing within the up channels. $SPX $NDX IWM may still need to drop a bit further in their green support zones before starting an up swing within the up channels.