understanding the psychology of behavior

The market is pretty oversold and sitting on some support, and the Vix is pretty overbought still at a resistance area.

Within this downward trend I still believe the VIX needs to go higher, and to signal the overall bear market to be completed, the Vix needs to be much higher. But within this current down move, the market may consolidate upward.

I covered all my market shorts, and I am just waiting for the market to consolidate from this downward move. Will look to add AAPL Jan 160 Calls today.

Covered some of my SPY put options as the Vix is overbought approaching SMA resistance, and the market is oversold, but still exposed to the down side incase the capitualtion occurs.

I am hedging this down side with AAPL Jan 160 Calls. AAPL is over sold, and may bounce with an uptick.

Will double down on AAPL at 160, and again if 150-155 is seen.

The VIX is up while the SP500 is up big.

Could be a repricing of options going on, or some behind the scene mechanics of the index causing this, but I am not liking it, and maintaining market protection.

The market has been acting nice the past few days and the Vix is acting like a bull market is upon us.

Becareful here. Take some profits in JPM and others that have rallied. I have been running around all week entertaining.

I added to my market short in the am.

An argument for a continued upward push can be made seeing how the market is coming off of an oversold position. Especially for the Nasdaq via the QQQQ coming off of the SMAs and being oversold…

The SP500 is still seeing potential head wind, but a possible move to the 200 SMA may take place, depending on the psychology of traders next week. IMO, there is no economic catalyst at the moment that will drive the market fundamentally higher, but that is a ‘wait-and-see’ regarding the economic data.

What leads me to be bearish is the VIX. The level of complacency is too high in this current economic environment.

The VIX is at the low end of its long-term range within a bear market. The Vix is sitting on support and oversold. A possible move to 16 should not be ruled out, but I would feel very uncomfortable if it does.

We are approaching a complacent market, one accepting the slowing consumer stage of the bear market, but not fully realizing the slower corporate profits that come along with this stage. Also, a potential Black Swan is being ignored. Geo-political events are in an interesting place at the moment. So much so, I feel uncomfortable with the Vix going too low.

The Georgia-Russia conflict can lead to a scary domino effect of events. Obvioulsy this can be said about any conflict, but Russia decided to enter a sovereign state during the start of the Olympics (which is to symbolize 12 days of peace, irrespective of events). Then Poland gets missiles, ‘coincendentally’. We saw Russia react within the media, but how did they really react? Did they allocate resources to Afghansitan supporting the Taliban. What will the Russians really do to (or what move did they execute) to get back at the US for the Poland missisle? Then, how will the US respond? Will egos get in the way of economic development, and progress toward the worlds people? All I know is, this conflict gives me the ‘chills’ (pun intended ).

I am seeing signs of being oversold, and wanting an oversold bounce. But I am also seeing signs of downward pressure.

Possible scenario is that the market rises for a bit, maybe the SP500 goes to 1280-1290, then the risk is back to the down side. (Unless some fundamental positive catalysts get pulled out of a hat.)

Will look to add to my continuous market short via 130 Oct SPY puts if the SP500 sees 1280-1290.

The market looks interesting. It is overbought, but has for the moment held support via the SMAs.

The market can move to the 1300 level, but I do not seeing it surpass it as the MACD will also act as resistance.  However, being that it is overbought, the reward is to the down side.
Ultimately I still believe in the thesis that the Vix will rise to the mid 40s before a bottom can be achieved.

Stocks are ultimately going lower. SP500 will probably re-test their lows.  The economic data is now showing the consumer is in some really bad places.  This negativity will spread, ultimately to corporate profits causing market weakness.  We are already seeing it, and we are probably going to see more of it.  The 1300 target bear market rally still may happen, but ultimately the reward is to the downside. (To me that means to keep a short position on until the VIX hits around mid 40s.)

No need to stress, just prepare. A lot of great stocks selling for a discount, below their enterprise value.  When I notice a market bottom (I will indicate when I do as I feel we have started the final leg of the bear market… ‘the consumer washout’) I will heavily purchase Call options in MA, GOOG, AAPL and other quality names experiencing severe multiple contraction due to nothing more than macro economic negativity.

Today’s move may have confirmed the SP to move to around 1300-1320. An intereting move from the SMA’s that were once resistance…

Potential confirmation of this is the move within financials. The XLF looks to now want to move to around 24.

(Something like this would make me want to buy JPM, but JPM is at a resistance point at the moment and is overbought. It can most certainly go up, but I am being patient with it.  I would like to enter JPM around 38, as a core position.)

What a difference 2 days makes. As I covered my heavy market short, the market continued to decline, and I thought I would be able to purchase AAPL, JPM and PWR at more attractive prices. But my-oh-my it was an interesting head fake.

The SMAs that were resistance for the market, are no more.

There is a sense of bullishness that may ultimately lead the SP500 to 1320 before a sizeable market consolidation (or the continuation of the downward move).

I do see a sea of resistance within the Nasdaq, so I do not know if tech will contribute as much.

There is resistance around 2400 (not shown) that maybe reached with an upward pushing market.