"Whole year" gain was wiped out within 2 days!

Last weekend, I was asked how the market would be doing this week. Here was my response: "Volatile! It's the FOMC week. Typically down on Mon then up Tue/Wed. Then only God knows how the market will react to the FOMC announcement". Well, as we have seen, the market has exactly followed this script so far, 3% mini crash on Monday, followed by moonshot on Tue and further more this morning but gave up all the morning gain by closing after the FOMC.  

As I have warned for some time, the market is sending a lot of warning signs but there was no fear whatsoever till late last week. All the sudden, the "whole year" gain was wiped out within just two days. Ouch!!😵 I'm exaggerated a bit here. "Whole year" here mean all the gain for 2020 till now that was lost in 2 trading days😢. Pure luck, I shared with my Family about buying VXX and SDS just before the "crash" last week" and after the panicky selling on Monday, I said to sell the quick gains from VXX/SDS. Since the sudden tank of the market was so strong, the volatility shot up about 40% on Monday, a clear sign of panic and depression in the short term. Armed by the script with my expectation of a quick bounce on Tue/Wed, I was even naked short TVIX before Mon closing, an extreme risky contrarian bet. Of course, I'm not doing anything crazy but with clear rationale why comfortable to do so as I shared with my Family. Well, pure luck again for a quick 10% gain from shorting TVIX in two days and I covered it prior to the FOMC announcement this morning. Now the question is whether or not the correction is already done and all sky is clear. The Tue bounce was quite impressive indeed as it recovered all the Mon loss and then some. It is easy to think the worst has passed. Not so fast in my opinion. As I shared with my Family this morning, here is the 2018 VIX chart my friend shared with me. Back then around this time as well, the market suddenly declined with VIX jumping high, followed by an immediate easing of VIX thereafter (the green circle). Just at the time when people thought the worst was over, the Market God mounted another much more severe plunge with VIX moonshooting to over 30, an extremely panic (the red circle). In total, S&P lost 10% within 2 weeks. 

Does the market has to follow this path the exact same way this time? Certainly not necessarily. But as Mark Twain has said, history does not repeat but often rhymes. Given the TA condition right now is so eerily similar to that in Jan 2018, I think the chance is high to see something very similar to happen this time. So fasten your seat belt and be prepared for a heightened volatility in the days ahead!😠