Cobra's Market View

Interesting divergence-- currently NYSE up/down volume is about 4/3 down, and Naz is about 4/3 up. But NYSE advancers are AT their HOD, while Naz advancers are well off, more mid-range.

So big money is dumping more largecap NYSE issues than largecap Naz.

Daniel wrote:Interesting divergence-- currently NYSE up/down volume is about 4/3 down, and Naz is about 4/3 up. But NYSE advancers are AT their HOD, while Naz advancers are well off, more mid-range.

So big money is dumping more largecap NYSE issues than largecap Naz.

TRIN is very hot… 1.51 -for those who want to know about TRIN .. http://traderhq.com/arms-index-ultimate-guide-trin/

We all know that short VIXs have been the most crowded trade for a long time
So covering all those short VIXs produces a big squeeze
Did the same in May
May’s VIX squeeze was over in a day, as SPY bottomed
This time may or may not be different

Last Friday night (8/5) Interactive Brokers announced greater margin requirements for Volatility Products
after expiration processing on Saturday, 19 August.
Other brokers were expected to follow.
Today “Saxo Hikes Inverse VIX ETF Margins To 40%” on Wednesday 16 August 2017, also hikes margins on Korean stocks
[I don’t recall this happening after the May VIX squeeze]
http://www.zerohedge.com/news/2017-08-1 ... margins-40

Speaking of a short squeeze, looking at the weekly volume profile it looks like we are filling out the bottom end today. Nice empty area above if they want to try a gap and go on Monday. ES 2460 or so would right in the middle of the drop, so a likely target.

With everybody fanning out from Washington to hit the weekend political opinion shows there could easily be some sort of sound bite that dials back the tension paving the way, or the deep pockets types could just bludgeon the futures like they usually do on Sunday night or early Monday morning. Of course I am biased because I do so fondly remember the last minute before the markets open press conferences during the Greek debt crisis.

SPY daily. That'll get your attention.

Due for some cooling off?

http://cnnfn.cnn.com/2017/08/11/investi ... index.html

By my count the ES is getting ready for the sixth touch on 2443.75 in two hours. Touched 2441 from above three times in the same 2 hours. Yawn.

breakout or fakeout, will know soon enough.

Comment on IB et al raising margins on VIX products. Found this from Mauldin Economics-

People are short VXX…
And short VIX futures…
And playing roll-down with the term structure.
People are selling variance outright…
And buying inverse vol ETFs…
And also selling upside VIX and VXX calls for income…
Along with massive overwriting and put selling programs.
All of these things are fine when some people do them—not when everyone does them.

The problem since May is that everyone has been piling into this, typical Wall Street follow the leader. So no way everyone can unwind quickly.
Reminds me of the delinquent loan rule. If you owe the bank 100,000 it's your problem. When you owe the bank 10,000,000 it becomes their problem, and yes at a two bit savings and loan I did see that work in spades.

From the view of the 401 K investor I suppose the week has been so dreadful that a red close on Friday won't matter much. Still this is not the sort of thing we have seen for a while. IF the market loses the confidence of the 401K crowd and the ETFs unwind it will generate some great opportunities for stock pickers, after the dust settles.

well, guess that's it for today. Monday has been generally bull friendly. thank you guys, I'll see you in another thread soon.

please don't forget our weekly sentiment poll which will be posted right after the close.

before the close, please take a little time to vote for me, thanks. https://stockcharts.com/public/1684859/tenpp

McClellan
"Volume in VXX Is A Tell For Price Bottoms"
http://www.mcoscillator.com/learning_ce ... e_bottoms/

our weekly sentiment poll is here:
viewtopic.php?f=9&t=2569

VXX volume today = ~12x average ...