Thread by @Darky999

Lots of confluences in SPX:

- Same c. 20% retrace as 2008 below going lower (also 38% Fib from ATH)

- Hit high end Hedgeye Risk Range at close (bearish trend)

- End of month rebalancing = some 'bid' to stocks

- Large IV disc. (30-40% across sectors)

1/N

@KeithMcCullough

- Usual MSM hysteria about Fed/Stimulus saving the day (maybe it does, but does it REALLY solve anything?)

- Market shrugged off 3.3m Initial Jobless Claims without even noticing (it was worse than consensus = complacency)

- Perma bulls saying to 'BTFD' was obvious

2/N

- VIX remains >60 for way over a week, making higher lows in its Risk Range (@Hedgeye if you want to sub to them)

- OVX still off the charts >150 all week (!!)

- GVZ still elevated at 37, slowly trending down (careful)

- TYVIX / MOVE finally lowering towards investible

3/N

- Initial Jobless Claims likely to be worse next week, not much 'talk' about this (as market focused on Thursday's number)

- USD is all over the place, it's super volatile, if it strengthens then that will be a large problem for RoW

4/N

- Most people in West in very early stages of lockdowns, in Asia we are 60 days in, it's a long haul situation (are you gonna make decision to be first to open a closed school...? Really are you?)

- Demand has vanished, are people thinking about 2nd/3rd order effects?

5/N

- Market just bounced the most in 3 days since 1930, not due to any fundamental improvement (actually virus in US is getting worse, faster; those following Asia/Europe know where it's going)

So what is the conclusion from all this?

6/N

CONCLUSION: There are no certainties, the close last night = prime opportunity to short risk, whether equities, HY bonds etc - take your pick

Probability of going down over next few days much higher than going up (using actual math, not just guessing here)

TRADE CAREFULLY!

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