Updates for Tuesday 6/21/22

• We trade 3x ETFs such as TQQQ TNA SOXL LABU UVXY using proprietary analysis of volatility.   
• Current trade record here. ​
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​Updates 12:45 PM ET - Monday

Upcoming key events
After all the events of last week, market participants were psychologically exhausted going into the long weekend. This coming week is much lighter in economic reports, but Powell is scheduled to speak on Wednesday and Thursday.  Some potential fireworks there.

Short-term: Bear market is not done, but it is getting a respite
Despite the Fed's latest attempt at soft landing, this bear market is not done yet.  But it would appear that there is a bit of a respite happening after the major sell-off right before FOMC last week.

• Crude oil has formed a short-term top and is heading down.
• Dollar has formed a short-term double top and is heading down.
• US 10-year and US 30-year yields formed a short-term top after reaching for 3.5%
• Major risk-on asset bitcoin tagged the lows near 17600, but has stabilized and is forming short-term bullish hammers on daily chart.
• Major risk-on asset biotech stock index (XBI) has formed short-term bottom and is trying to climb.

Nasdaq percentage of stocks above 200-day MA dropped as low as 4% last week, before recovering to form a bullish doji on its weekly chart.  It closed at 8%, certainly down in the range of capitulation.  But the charts are not sending out a clear "capitulated" message just yet.

Long term:  $SPX to 3000 and then 6000?
All of this is very depressing news for most people. But you may cheer at the following projections.   One of the most bearish analyst on Wall Street, Michael Hartnett, came out with some interesting predictions for this bear market.  Essentially, based on historical data:

• Current bear market will be done when $SPX reaches 3000, which is projected to happen by late October this year.
• Then a new bull market will start.
• The new bull market may reach as high as $SPX 6000 by 2028.​​

Short-term volatility signal:  "Transition"
Zooming back into the short-term tactical trading perspective, we focus once again on the keeper of the market rhythm: $VVIX, otherwise known as "vol of vol".

So far in this bear market, when $VVIX has formed 4 topping spires is when the volatility signal becomes "Approaching Bullish".   Then when $VVIX drops below it 200-hour EMA, rises back up and tags this key resistance, volatility signal becomes"Fully Bullish".

We don't have that setup with $VVIX yet.  $VVIX has only formed 2 spires so far.

But in case we're wrong about this projection, we are also going to track it via SVXY.  

​Key S/R levels
While SVXY forms W bottom, here are the key S/R levels to monitor.

• S&P:  ES forming W bottom between 3639 and 3843
• Nasdaq: NQ forming W bottom between 11069 and 11794
• Small-caps: RTY forming W bottom between 1640 and 1755

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​Disclaimer
The information presented here is our own personal opinion.  Consider it as food for thought.  We are not offering financial advice.  We are not promoting any financial products.   We are not registered financial advisers or licensed brokers.  We make no guarantee that anything will unfold according to our projections.  You are proceeding at your own risk if you follow our trades.