Is this the bottom?

How bottoms have been determined in the past

Over the last week, actually, couple weeks markets have shown resilience to the upside. Much of this market movement has caused optimism amongst the crowd. Will this caused the Fed to stop raising rates? Is this a soft landing or just a head fake?

In the past recessions, past market, downturns, markets have bottomed soon after corporate earnings and revenues have bottomed. Microsoft reported this week with lackluster earnings and more importantly downward guidance into the next quarter. This should be an indication to all of us that they expect their revenues and their earnings per share to decline. Yet at market close the next day, indexes were up. We’ve seen this throughout the rest of the week. So what truly is driving us market gaines?

Over the last couple weeks, I’ve been harping on zero days to expiration options and the activity on the SPY ETF. Yesterday once was again a massive volume day on the Jan 27 $403 and $404 Calls. The volume was 434k and 405k respectively. These are massive numbers. If you have been tracking the daily volume behind these type of options, you will agree these are enormous numbers! What these options are doing is suppressing volatility, in this case, the Vix below 20. And in some days below 19. Below 19, markets get into a bullish environment. Below 15 on the VIX, we then are truly in a bull market. As long as we see, a combination of revenue and earnings per share increases, then we have a bullish market.

But we do not have that. I believe we have an enormous amount of market manipulation that at some point will reverse itself. Until then I have to remind myself that you play the market you’re in not the market you want to be in. Recently I have taken some hits on my trades. I reminded myself today that I needed to step back and really take a look at the landscape and what truly is going on and how to play it rather than trying to play a Market that I have in my head.

Live Loud!

Trent

A quote that motivates me and gives me comfort: “If you are not scared 😳, you aren’t going fast enough “ - Ken Block.

Disclaimer

This is not a recommendation or advise.