SPX first gap filled 3,759. Another one left at 3,674. I sold half off my objective entry at 3,790s. This is an update on my hedge/short trade with SPXS. 

XLP and XLU, not sure if anyone took these with me when I posted them, though essentially were both the bottom when they were posted. Just looked so overdone, given the business, dividends, and both at major demand zones..attractive given the backdrop. I believe XLU would have qualified as a demark 9 buy signal as well. Still learning about that. 

I took an objective hedge entry via SPXS premarket when SPX was in 3,790s. I don't think the 3,759 gap or the 3,674 gap hold longer term. No idea on the timing. I still own LABU long core, though trimmed a few more at $6.50. 

XBI peeking its head above its 50 day: https://schrts.co/JhsEpfsB 

Is that the same as the 9 countdown buy signal I've heard referred to before? 

DIS Could be one to look at. Down to a 29 RSI here. Upgraded this morning by BofA with a $122 target. 

https://seekingalpha.com/news/3851165-walt-disney-rises-as-bofa-says-park-demand-is-strong-boosts-q3-estimates

Chart: https://schrts.co/vigfDAEH 

XLE If this view you shared on energy stocks comes true and they were to go to new highs, it is big time negative for the market, consumers, etc. It does look like it can bounce here with the bullish percent being at 4%. Question is after that bounce plays out, could take some time, where it goes from there ? 

If the SPX is going to come down hard again at some point in a climatic wave, the business cycle would suggest that energy would have to fall as well. All assets will fall on that type of washout.

 This is where stop losses would have to come into play on objective entries if making them as usual. I personally prefer to stick with a few instruments unless there is an absolute crazy washout to a support or extremes like more recently where you can short it with lower risk. 

I really only play the multi year extremes in energy. I think it is funny how many managers were saying you gotta own energy now when it was at the highs. Nobody wanted it a few years ago when it was actually a major buying opportunity. Kudos to you guys for pointing out commodities before the big move happened this year. Also well ahead of the downturn in stocks. What a freaking mess. 

1000% agree with what you said in regards to turning off the political stuff. I listened to a few minutes of that hearing yesterday with Powell and was laughing. The Fed board is a show, they do the will of who employs them. If they don't, then they will be out of a job. System is broken unfortunately. It is better for me to just focus on the price action. Kind of like mapping, it is helpful, though can't focus on it when trading, just have to obey supports and resistance. 

Had a great day out yesterday at an event with my wife, she still is serving active duty in the Army. About 3 years or so left now and she can retire. We did a museum trip and there was some good conversation around everyone's backgrounds and how we all related to the history. Really good community effort. When we can get out and do those kinds of things, it becomes a bit clearer on why there are differences and similarities in thinking. Even things there are consensus around. It was a chance for everyone to be heard. Way better than the media directing the conversation. We stopped after the event for some bowling and food. I'm feeling sore in some areas this morning. 46 is not the new 26    

The real issue though is that the government has failed, not the Fed in my view. This government hasn't run a real budget or responsible policy in decades.

That being said, I'm trading what's in front of me. No way to know what is causing what. It is simply a card game right now. Play each hand one at a time. And continue to recognize I don't have to play every hand. Risk/reward.

FULL COMMITTEE HEARING

The Semiannual Monetary Policy Report to Congress

https://www.banking.senate.gov/hearings/the-semiannual-monetary-policy-report-to-congress

I'm showing it is right there on mine. Guess it depends on what time frame you use. Would seem reasonable to test at 3,830 at least from last FOMC high Steve mentioned at least. Looks like we just shot above the 9 day to 3,792

Watch that symmetry break get further validated today...maybe the market finally got bearish enough. Still really don't like that 3,674 gap lingering out there longer term. Would be great to get some higher prices to be able to trim trades and possibly short. I want a few upside gaps to get filled, maybe even 3 before considering it. Lot of room for a rally when they finally let it go. That liquidity issue works in both directions. I see we just took out the 3,780 pivot Steve mentioned and made a hod, maybe there is hope after all. 

XBI is trying again, getting closer to the 50 day now. Would be nice to break out of these 71s. Still long LABU

It would be great if we could just get a limit down in markets. Open up, get more selling, form a wick (capitulation low) and be done with this game for a while. The big money isn't buying until we see contracts rise another 30-40%. They have made it clear they aren't interested until a real capitulation. 

Maybe we can get it around the Powell testimony the next few days or this week. Someone made a point about demand destruction being the only cure to the inflation. The market is going to handle this now. 

The government has proven for years to the present that they can't run a budget. No way out now. We can't have people owning houses that aren't responsible or living beyond their means ongoing. That has to be adjusted. There used to be rules to be trusted with more responsibility. If you didn't meet the requirements in the past, you didn't level up. There is a reason for it. Giving things away doesn't do anything when there is no education or habits being built. It isn't sustainable. 

As you guys have discussed, let's pray we can get out of this with just a bear market and not something of greater concern. Sri Lanka's economy has collapsed per their Prime minister, just seeing news on that. 

Watching that 38% fib area over the long term, seems it would be a stick save if we can get support anywhere above that and needs to go even lower over time. Maybe this is a kind of bearishness that is needed to actually bottom. Fortunately I sold my trades yesterday when we pushed into the highs and it was clear 3,770s were shaky. Just wasn't seeing how it wasn't going to be volatile with Powell's testimony and the markets being so illiquid. 

That's my concern as well. I just can't short at any price, I want higher prices to short again. Close a few gaps at least. Probably won't get what I want. It's fine, wait for another pitch. I walked a lot when I played. Make a mistake and I hit the ball hard. 

SPX The playbook all year has been to trap longs with a good close that would normally follow through and just drop it the next day. Remains to be seen if it happens again of course. Only the wizard behind the curtain knows. 

If we continue the trading rally higher, not sure how the 3,674 gap can hold long term. That being said some gaps above in play too and we haven't even reached the 3,825-30, 9 day ma area yet. 

SPX 9 day showing 3,825, which is congruent with the possible count Matt showed higher as well as Steve's comment about 3,830 post FOMC highs. I originally sold my SPXL at 3,747 area, though jumped back in the trade once it was confirmed we had a gap and go (trend day). I used less exposure on the re-entry. Sell some/keep some strategy. Still long my LABU core as well, though just trimmed a few at $6.00. One level at a time. Lots of gaps above starting with 3,789.99. 

Cathie's price target is 1,223% higher than Friday's close. She's calling for a worker rebellion nationwide now. The math gets interesting when you're that far behind I guess for her   

first gap at 3,789.99..overshoot would put us at that 3,830 retest Steve mentioned post FOMC. Very astute gentlemen, thank you

June statements will be the reality check for investors. Many only look at the quarterly statements and they were ok in March because of the runup to 4,600s. Of course much different now because stocks AND bonds are both down substantially since then. That bond impact (historic) is really going to make those statements look much worse than just having stocks down 20-25%. Not providing the ballast they are in traditional portfolios to provide. 

Worst of it all is, the advice of most financial advisors is to just keep the faith and hold on, comparisons being made to history. "It always comes back if your timeframe is long enough". What I don't like about those comparisons is that in all those periods, we had supportive Fed policy (easing). Right now policy is not supportive of assets prices, it is actually in reverse. In addition to this, the financial issues aren't being solved otherwise. Money is being spent like there are no issues right now. The trouble markets are having today are many years in the making. 

Once the Fed buys some room with the hikes, balance sheet moves, and temporarily calms inflation.. I think they will be back in a position to have to consider easing again to stay afloat. With parties being so far apart on solutions for anything, I'm not sure where the long term solution is, other than everything going much lower to reset. As has been pointed out, the best to hope for is that we are systematically ok when that time comes. 

I'm talking big picture long term here, though still believe there will have pockets of opportunity at times. Just will need to continue to be flexible as markets change. 

$SPX This morning's gap up to me is further evidence of how illiquid this market is. I shared a bit back that it can be moved in both directions pretty effortlessly. It makes me suspect that the big money will influence a capitulation before this bottoms. I would be shocked if we can just gap and go and not look back here. Not the normal way that markets put in a bottom, even a tradeable bottom. I've been wrong before though, just ask my wife