X
X
Tired?
Unfocused?
Off your game?

Read our free Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
YES, SEND ME THE REPORT !
NO, I'M NOT INTERESTED
Your email will always remain private.

Market Lab Report - Premarket Pulse 10/2/17

Major averages closed near the top of their trading ranges to new highs on higher volume. This is noted by the action in the Russell 2000 which has been outpacing the other major indices as of late. The market believes the Trump tax plan will spur the economy based on corporate tax cuts and could cause a tidal wave of internationally held cash to flood back into the US. The repatriation tax holiday incentivizes US-based companies that do big business overseas to bring those profits back home. As much as $250 billion could be repatriated, not an insignificant amount.

But that does not mean all is wine and roses. The VIX is heading back down towards all-time lows. Complacency has been growing as shown by record levels of short interest on the VIX which suggests investors are convinced market calm will persist, thus willing to take on more risk. The majority may fail to realize the strong mean-reverting tendency of uncertainty judging by the new record short in VIX futures, extending last week's surge.



Unsurprisingly, the majority is always caught on the wrong side at major inflection points, not because the crowd is always wrongly positioned. The crowd can be right for a time, however as extremes become more extreme, more of the crowd piles on thus by way of human nature, the crowd will always be wrong at major turning points.


And when the market turns, the VIX will spike as will the UVXY. Keep a close eye on the UVXY 620 as an entry guide. We discuss it here:

https://www.virtueofselfishinvesting.com/faqs/answer/the-6-20-moving-averages-and-macd

It is an intraday signal that can turn on a dime. The lower the VIX goes as it breaks to all-time lows, the greater the odds of a correction.

Nevertheless, QE is the dominant factor in record low levels of the VIX. Despite some who say QE is past history since the Federal Reserve ended QE back in 2014, what counts is the total aggregate QE by all the world's central banks which remains at all time highs. This explains how central banks are now the majority shareholders in some of the most liquid stocks. It also explains how the market has been unable to correct in any meaningful way all year. Indeed, the S&P 500 has corrected the least amount since 1914. 

Equity futures showed resilience in the face of the deadliest shooting in U.S. history, killing more than 50 and injuring at least 200 others. The tragedy occurred last night on the Las Vegas strip. The alleged gunman, who has not been connected to any militant groups, fired upon a country music concert from the 32nd floor of the Mandalay Bay Resort. Futures remain mildly higher.

Like what you read?
Let us help you make sense of these markets by signing up for our free Market Lab Reports:
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
FOR OUR FREE MARKET LAB REPORT :
Copyright ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing.
All Rights Reserved.
privacy policy