Updates for Wednesday 9/7/22

Click here for Signal Trades spreadsheet.

Updates 9:41 AM ET - Wednesday 9/7/22

Bounce is happening
Our schedule does not permit us to trade the quick bounce, but it is happening.   $VIX has formed another short term top, and $VVIX is not ready to rise over its 200 EMA line yet (see below).   

Bounce may last until Powell's speech tomorrow at 9:10 AM.

We are still aiming to enter SQQQ.  See updated entry price in spreadsheet.

Updates 6:40 PM ET - Tuesday 9/6/22

$VVIX is warning of potential surge in volatility soon 
$VVIX chart has been tough to interpret as it has been in a range since start of August.  However, by end of day Tuesday, $VVIX 2-hour chart below shows a worrisome pattern.   

$VVIX 20 EMA blue line and 50 EMA red line are bunching up and about to cross over its 200 EMA green line.   This mean volatility is likely to surge soon.   

While the surge may not happen on Wednesday or even Thursday, the probability of $VIX surge at this point is high.  

Dismal breadth
In addition to the warning from $VVIX, market breadth is back to seriously bearish.   The charts for NYSE and Nasdaq percentage of stocks above 200-day MA show continuing sharp drops. 

• NYSE has dropped from 47% mid August to 25% by Tuesday.   
• NYSE has dropped from 48% mid August to 19% by Tuesday.    

Big-picture signal: bearish;   short-term signal: bearish
So while a bounce is possible, we are not holding our breadth.   Bearish sentiments are very strong right now.   

Trade plan
We've exited our TQQQ position entered intraday Tuesday to test the bounce.  We've manually sold this after hours, and have raised entry targets for SQQQ.

We aim to capture the bearish ride with these two SQQQ posititions.  The runner position is for capturing as much of the down trend as possible without frequent trading.  The swing position is for taking partial profit and re-entry on pullback.  The buy price listed are targets for now.   They will be adjusted as we get more data on Wednesday.
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Click here for Signal Trades spreadsheet. 

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. ​​​