SPX 3,854 would be a 20% correction from the highs, coincides with the 3,815 fib, 38% fib. An area I've had in my 2022 forecast for sometime. My 2022 forecast range is 3,800-4,800 which I included overshoots in (forced liquidity and/or momentum). At the beginning of the year I called for a 10-15% correction in SPX and the 15% area came in at 4,095. We hit 4,062 on the recent low. 

Good day yesterday for shorting and hedging. It took having to have flexibility as usual. I originally took off my hedges at 4,170, only to put them back on when markets went down and back up to test that area again. I have a statement on my white board in my office that I adhere to when trading: "Be flexible when markets change". 

My last buys for my long term accounts were at low 4,200s. That is inventory that I repurchased after selling at 4,800 area highs last year. I have inventory still from much lower prices in the corona crash buys. 2018 during the 20% correction on Christmas Eve was another major buying time for me. I remember because I was still in the business and worked 14 hours that day helping clients take advantage of those prices. 

I have a good friend who has been a bear for many years and we share our insights together. It helps keep us balanced in our strategies and create a plan that suits our personal tolerances and time frames. I come here for that as well. 

I'll be out in nature again today and not watching every tick. I do some trading, though limit my activity to particular days of the week when I feel I'm out of balance. Too much computer time or news isn't worthwhile for me. Once the analysis is done and plan set, then I just watch the close prices to see if I need to adjust. Simple alerts for particular areas on the indexes save me a lot of time. If the SPX hits a certain number, I get a notification. Otherwise, no need to watch. 

I'm allocated with a cash, fixed rate interest accounts, fixed rate bonds, and stocks. All of which I can sit with through a corona crash situation and be ok. We would be ok if markets went to zero still (we would have much bigger issues anyway if it gets really bad as a world). Our income isn't based on it or living needs. So there is no fear in the equation when planning that way. I learned long ago that if anything was keeping me up at night that I had too much. It took me years to figure out the right mix and I'm sure I'll continue to adjust as I age. But those aren't overnight decisions. 

 Lots to be thankful for waking up this morning. Looking forward to seeing my grandson in 3 weeks or so, he's 7 now. Will be in Florida for the week.  All the best, enjoy your day. 

https://www.cnbc.com/video/2022/05/05/the-seeds-of-recovery-are-being-planted-on-days-like-today-says-ritholtzs-josh-brown.html

I agree and had that in my one post about liquidity. Very important point for navigating

I'm fine emotionally. And no problem with the disagreement. I'm here to hear opinions other than my own, that is what a board is for. None of what I posted has changed my strategy at all. 

Good to see someone concede that they didn't expect this kind of move. I'm seeing "weatherman" posts on boards and sites around markets that this was expected. Just goes against all logical technical analysis and markets period. 

Then if the market rallies, you'll see someone pull out their other side of the argument post giving the bullish side. All I'm saying is, you can't have it both ways when you are investing or trading. Account balances don't work that way. The weatherman can be in business whether it rains or shines, but investors have to choose one during risk/reward points and make decisions and stick to a plan. 

It is always easy to show after the fact what happened and that there was a possibility of it. Bottom line is, what happened today was a 1 in a million chance. Just like yesterday was wild as well on the upside and biggest move since 1979 after a Fed meeting. Turn on ESPN and they will tell you the guy shouldn't have struck out or what someone should have done. Issue is, they aren't playing in a real game. 

I appreciate all the work you do in providing information here. I take responsibility for all my own decisions. I always have a plan. You guys preach here often about having a personal plan and executing accordingly. I think most here have a plan and it is a great group of traders and investors. I prefer being here much more than general sites like Twitter or others. 

Nobody knew this was coming today. This is the equivalent of a bad beat in cards. I just sold my hedges into the lows 4,170 area. I honestly didn't think I would get the chance to do so. Nothing new here. Same ol news, same ol same ol. Low liquidity, slimy, trap market. I wonder what psychology programs are being used with these moves.   

XBI That buy off the 72 support was huge being off a 12 year trend support. Matt had it in the one newsletter. Not an insignificant bottom and I got heavy long there via the 3xetf LABU. 

This is one of my best ideas for years ahead. Goldman Sachs agrees and there have been billions flowing into biotech. Soon as the market lets it go it is a huge winner. I wouldn't be shocked to see it double down the line or more. Reminds me of energy when it was left for dead and nobody cared a few years back. Here was that chart before it moved recently, it closed at $78.58 yesterday. 

The world needs these solutions and companies need new profits. 

Muni bonds have not had any bounce at this point. Interesting area if wanting to own some higher quality assets in the space with tax free interest. Haven't seen any opportunity like this since years ago when a few analysts were calling for world doom in the space. That was a massive opportunity. Anytime you have the higher quality stuff down this much, it should turn out well years into the future. 

I realize rates are a challenge, though at what point do they just make sense? Here is the performance history of a few funds, showing just how rare getting to buy this asset class down 8% is:

https://finance.yahoo.com/quote/MUNI/performance?p=MUNI

https://finance.yahoo.com/quote/TWTIX/performance?p=TWTIX

My consideration was to look at this area as another place for shorter term cash as I bonds are limited as to how much money one can do per year. If one wants maximum flexibility, just buying a high quality etf would make the most sense. Wanted to brainstorm on the high quality etfs to buy here in the space? 

Thanks for your work on these Steve, I appreciate you

Bears gotta be wondering if that was the bottom though, it has to be in the back of their minds. Inflation reading will also be better and the peak inflation argument will be out there. Buffet bought $41 billion recently in assets. Climbing the wall of worry? Gotta stay balanced and not assume this has to resolve lower. It certainly can, though we are starting to repeat the same stuff over and over. Earnings reports have been fairly good and many areas already destroyed over the last few years internally. 

And there it is, so glad I was loading into all that end of the world talk. 246 points so far off the 4,062 bottom to today's high. Plenty of money to be made in many areas. I'd be shocked if it just moved straight back down after a power move like this today. This isn't a one day looking candle. A lot of people are off sides here now whether not long enough or short at extremes. 

Really feels like everyone has been worn out and given up at this point after the worst four month start in 80 years..There could be a good air pocket here to get back up to 4,280 or higher. 

There will be an inflation reading lower than the recent highs and there will be cases made that peak inflation has already occurred. I also find it interesting that long outflows have been heavy and sentiment is very bearish. 

I don't think that changes the Fed's course because they are a typical board that is behind the curve (could have raised last year with strong earnings and a market at all time highs). Now they are going to raise into market lows. Can't make this stuff up. 

So we know what is wrong already and have for some time. It is much too bearish for the many good earnings reports that have come out as well. Not saying the long term view is different, just that I think from a trading perspective it has some legs higher before lower. 

For sure. My thought is that it won't go that low and the gap will be protected on this wave. It will fill after a rally down the line if it is going to. 

A 15% correction from the highs comes in at 4,095. There is the 4,020-34 gap as well. I'd say that is capitulation if we could make it in there somewhere, particularly where we have come from in this down wave. I would consider selling hedges down there. 

DIS  Just amazing to see how much this has dropped since the last earnings report. If the market can hold up, maybe it sees some short covering into the next earnings report in May. 

My leveraged long sale was perfect into that 4,306  when I posted here and I put on a hedge at that time to work against my long term account holdings that I own at lower levels. I sold half of the hedge in after hours on that big woosh. Let's see what the trap master market serves up tomorrow. Will we visit the 4,183 open gap lower now? Or is there another unexpected move? Game on.

Solid performance. If you look on balance, a lot of the earnings have been good. Visa strong yesterday and travel is coming back strong (airlines, cruiselines, etc). There are headwinds, though it is a strong global economy with demand. 1Q GDP was negative which means next quarter should be too. That means we are in the middle of a recession if that is true. Markets look forward and markets can perform in that environment with the other factors. Going to be super interesting to see what the Fed does. 

Not complacent by any means, just pointing out that some things could go right too. AMZN hit a rought patch here, though I think they will sort it out with price increases and supply chain will get fixed over time. They have several businesses. 

I continue to believe that Matt's frustration pattern may be more like the 2022 story. I call it the "frustration" pattern because it won't pay much to buy and hold being a bull or bear. Seems to be one big range. We need more information. As you always say, trade what is in front of you. Risk/reward. 

Is it me or is the SPX looking like one big reverse h&s pattern now? 4,158 head and two shoulders off those 4,220s (the market's favorite number this year). Or are the data points invalid? I don't know what qualifies as a reverse h&s, though always respect price action. I just sold my leveraged exposure on SPX. I put a hedge on for tonight's earnings. I have a long term portfolio that it will protect in case earnings aren't good. If they are, I'm still in good shape long term. Tough market and backdrop. Seems things either get too negative or too positive quickly this year. 

Great trading kobie, you've been all over it. Was cool we got our buy the other day instead of chasing the gap too. I guess sometimes we get what we want lol

I bought a good amount off those 72s. I will scale it if this market heads down more though I think this is a ridiculous long term opportunity to buy. I have some LABU as well 3xetf