Saturday Morning Blog #2: Shorting Parabolic Moves, Timing for Size, Being Exhausted, Minimum Capital Needed.

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Well… Shit just got real…………………….. lets be honest here. The action we saw the last 2 days was NOT HEALTHY. Especially for financials BAC , JPM , GS, MS etc. Although a retest if the lows is normal and necessary in the markets I think people still need ONE MORE big washout day on Monday to exhaust before a REAL rebound on everything. Be prepared for worst case scenario… We can EASILY wake up with DOW -500 and go down to DOW -1500 before DOW +100 happens. Im sure the range tomorrow is gonna be MASSIVE. We closed right at the 200 day moving average (the key level where we bounced off last time) … it might not hold this time around so be prepared for SPY $253 tomorrow or in the coming days. This MIGHT BE the end of the 10 year bull market, or it might be the last trap before everyone gets their tax return checks in April and dumps it into their 401k’s causing the market to (temporarily) rebound. I have NO CLUE whats gonna happen but I KNOW a retest of the lows is healthy and it is MOST LIKELY going to happen soon.

NFLX: Expecting another washout day in the market tomorrow. This is trading near the key $300 whole number level. Im certain there are many stops in place for when it breaks that number. Will be looking (if market permits) to bounce this near $295 using $290 as the guide. If the market gaps up I am 100% short bias on it using $310 as the guide.

AAPL: Beaten down chart. Has not had a meaningful bounce…. DOES NOT MEAN IT CANT GO LOWER BECAUSE IT CAN. Will be looking for a morning wash near $160 for the long. Else ill leave it alone.

VXX: Im so confused as to why there are no power upticks on this one yet. It seems like “no one” thinks the market is gonna unwind and a retest of the lows is natural. No one is scared… YET….Sure, I also think we are going to retest SPY $253 tomorrow or in the coming days, but something about this chart doesn’t make sense to me. IF we washout tomorrow on SPY and rebound big this can get clobbered down to $45-$47 … BUT if we wash and continue to wash maybe some fear comes in and this does $60… I have no real bias yet. Just need to play it based on the action I see in the morning.

MMM: They do a lot of business in China and all this tariff nonsense is smoking their stock. In a perfect world we get a day 3 washout on $210 for the rebound play. Again, none of these rebounds will work if SPY doesn’t cooperate tomorrow. Be prepared for the worst and STICK TO YOUR PLAN.