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Scott Redler’s Dog Bytes: Hard Times!

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Over the two weeks, we’ve been cautious because of macro issues like Evergrande/China, the Debt Ceiling, Fed Tapering, and US tax hikes.

From a technical perspective, the SPX got faulty and then lost the 8/21 day to have active traders reducing risk. 14,000+ traders around the world have read my moving averages ebook, so hopefully you were more careful.

For a market correction to happen, you need a close below the 8/21day. Then we get Price Discovery. Everyone will guess on what comes next. We'll map out levels and be tactical and measure things along the way. In a sea of red, we'll see if any groups can go green for a trade. That should be your big focus now.

Now let's dig into the major ETF's so you know what to watch to start the week.

Tech got faulty late last week, especially Friday when I got out of all the F.A.N.G. type names. Now we’ll see if QQQ’s can hold the 50 day near $368.50-$369.50 for a trade. If that zone breaks, volatility will spike further with the 100 day all the way down at $360.

IWM had a little relative strength on Friday, but it still isn't special. For today, see if it can reclaim $219. Otherwise, I’d avoid it.

XLF closed below the 8/21 day which makes the banks an avoid. Now see how it handles the $37.15 area.

I gave OIH until $184 as the energy sector is always tricky. Some are giving it to $178. I'll see how it acts the next few sessions.

Two weeks ago, I put on a big VXX call spread in case volatility hit. I took the October 15 $30/$35 spread for a cost of $0.65 to make $4.35. I might trim some 20% the long side and keep the short side. Usually, VXX spikes only last a week or so and it's less than a month to expiration.

Positions Disclosure as of 9/20/2021 at 8:24 a.m. ET

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