Double Bottom? 23rd Sep 2022

22 ก.ย. 2022

🖼 Daily Technical Picture 📈

➤ There's very little insight I can provide with the current price action. VIX is stuck at elevated levels and not moving anywhere. Price is moving lower to the support levels. If you weren't already in a short trade, it isn't the best place to start. If you are looking to buy, prices could continue to move lower. 🤷‍♀️ Risk to reward for new trades are probably in no one's favour.

➤ So, let's instead theorise about a Bullish case at this moment in time.

● War in Ukraine is further entrenched with more troops deployed by Russia. The West will counter.
● Interest rates are going to rise further to 4% or more
● Demand destruction is everywhere. Jobs being lost, company profits falling, consumers tightening. We are looking at a hard landing.
● China is dealing with Covid lockdown fatigue and real estate woes

➤ With all these ugly headlines, S&P500 is still holding above the 17th June low. Has the market sufficiently priced in these outcomes?

➤ On the technicals: You could argue that the leg down from15th Aug is a much less aggressive move than the April down leg. It's a gentler slide in prices. VIX is reflective of this by being stuck at a comparatively lower level.

➤ Given these conditions continue to hold, price could form a classic double-bottom and a major bullish move is not far off in the distant future.

➤ My exposure is currently 0% with no positions. The maximum portfolio exposure is +/- 200% on capital, the level of highest conviction.

➤ Conclusion: Still waiting on the sidelines. Eager to get back in the action but only the right time! 💯