Stock Market Technical Analysis Blog
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In the market today, they shifted into full propping mode to prepare the market's reaction to Ben's taper decision tomorrow. As I mentioned before, the VIX and SPY trade inversely and normally have opposite mirror images of each other. This morning the VIX started climbing and continued to climb which just was not acceptable to the boys so they started heavy hand forcing the SPY upward in lock step with the VIX thru the day until the final 15min when they both dropped. The SPY and VIX trading in the same direction is the easiest way to detect intense manipulation as shown in the intraday SPY and VIX charts at the top above. This type of manipulation tells traders that the move upward is not real and caution should be taken.
If the market seems genuinely okay with the amount of tapering announced tomorrow, it's possible they could start a short squeeze on Thursday morning as everyone is anticipating the market to at least have a bad knee-jerk reaction to tapering becoming official and many will be shorting heavily. If we continue to go sideways tomorrow and If the market feels stable after the announcement tomorrow, I may be looking to re-enter on Thursday morning. Key word being IF.
Trade well my friends
Alan
