The market gyration will continue

Given there may be some significant moves tomorrow, I decide to write something today.

I wrote before (see here) that Mr. Market is just like a schizophrenia with a temperament hard to predict. After 10 years plus virtually a straight line up for the bull market with extremely low volatility, we start to see more and more volatility now. The mood changes by Mr. Market are truly insane and it can jump from the two extremes within days, Oh, no, can be within hours from time to time!  We saw big gyrations this week, which is more so for VIX. Monday noon I told my friends to expect for a jump for volatility. It did jump by 10%+ from 14+ to 16+ by Tue morning. While I was expecting it to jump more to about 17-18, VIX literarily just shot up for a few hours and soon thereafter it faded and came down now to 14 again! For anyone trading for the volatility, they must be very nimble and superfast as the profit window can just be in terms of hours, not days! True insanity!!

Now S&P has totally overcome the depressive mood in the past week and is challenging the resistance around 3020ish today as I predicted last week. As you can see, how the resistance was withheld as S&P literally just touched 3020 but walked back immediately. While anything is possible, I very much doubt it can break it out by this attempt in the next few sessions. One pattern that has played out quite consistently in the past couple of years is the market moves prior to the upcoming FOMC which is always on Wed for the decision announcement. For whatever reason that I’m not smart enough to understand, the market tends to decline on Fri and Mon and then moves up on Tue and Wed morning before the FOMC decision. Then anyone’s guess how it will react to the announcement or the Fed Chair’s new conference in the afternoon.  It is not 100% that way but it is consistent enough to become a kind of norm. So I bet we will see some weakness tomorrow and Mon. Actually today’s nice jump of the market has somewhat pushed itself to an overbought area, which by itself can be a trigger to a technical decline. The significant weakness at the last hour did seem to be bearish in my eyes. Interesting to see how Mr. Market will behavior tomorrow!

I’m gearing up for another VIX jump now!