THIS COULD BE THE 100X OF THE YEAR. SPX, NDX, VIX, USD, ANALYSISSPX has been ranging at the D 200 SMA today and depending on which way it breaks, I'd expect moves to start in a lot of other asset classes too NDX has been selling off all day, by contrast, and because so much market cap has gotten concentrated in the top 5 stocks, they account for ~45% of NDX and ~20% of SPX.
So there's a lot of inherent correlation just from that.
This is probably the best spot that exists on the chart right now for equities to finally roll over.
The run over the past 2 months has been the sharpest rise in SPX history.
Which is insane.
P/E for SPX is right about at the 2000 peak. By other metrics, we're the most expensive since 1929.
Regardless of measure else we're significantly more expensive than the Feb top.
This move is widely attributed to a massive new interest in retail trading accounts since the crash, which is like textbook.
It's certainly the same exact thing that happened in 2018 in crypto after the initial pop, the argument for going any higher basically amounts to "bubble is not over yet."
My assumption at this point is that a crash back down would be pretty violent and I'm assuming that because of how absurdly overextended we are.
NDX is nearly back at ATH. Like, what?
Between Feb and now 20-30% unemployment happened, forward earnings tanked hard, and a bunch of obvious large risks are on the table that weren't before. At some point fundamentals do actually start mattering. This may be the most disconnected from them that we may see in our lifetimes given just how extreme the rift is.
We're staring down numbers that haven't been seen since the 1930s, and most people with a memory of the 1930s are dead, but IMO if we reject the 200 SMA here and dump - a very realistic scenario for the last 2 hours of the cash session where volume spikes back to open levels, the goose is cooked and it will be so obvious to big money that we're going lower that we'll go lower fast in the next few sessions.
Treasury futures are generally around pivots for continuation up or to mean revert down. Everything is set up for a large move one way or the other. I think the only thing that would truly surprise me at this level is more VIX crush.
The ultimate safe haven is USD and USD equivalents that can be used as collateral which is to say treasuries.
Margin calls are denominated in dollars, not gold. When things are darkest, institutions take their profits on gold to get more liquid. This happened in 2008, happened briefly in the Feb-March dump.
For better or worse, as the global reserve currency USD is what people need worldwide when things dump in 2020.
So, the money supply hole the Fed is trying to print into is far larger than just in the US. This appears to be why DXY melted up in March. Institutions abroad needed dollars and had to sell other currencies into it.
The position I currently have which I'm most excited about are moonshot June Eurodollar calls
I think if a dump plays out treasuries melt up, interest rates go negative, and it happens about as fast as Feb (which took 2 weeks to move interest rates down 1.2 points)
but it's a very high R:R bet to take and it probably needs to be right less than 1 in 10 times. Arguably it's as high as a 1:100 R:R scenario.
TL;DR: a lot of things are at pivots and SPX is at the D 200 - a very strong move on a lot of things is very likely once SPX decides which way to go.
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