This KISS Report below was issued to subscribers on November 20th and gives insight into how Mella was approaching the steep correction during that week and how she was preparing us for a big bounce to come despite high uncertainty. The context: Markets were highly stressed and $FAANGS in particular were falling apart with many being down over 20-25% off their highs.
Mella saw technicals lining up for a big bounce despite the high uncertainty surrounding the action.
For context some tweets she sent to subscribers on that day:
Here’s the $NDX chart that ended up rallying 7% right off of this analysis:
Here’s the KISS Report:
I wanted to jump in today and offer my thoughts via a brief.
Recently we have seen many mixed technical patterns making clarity difficult. I see inverses, wedges, bear flags all across the board for the last week. It’s been a coin flip in my opinion. Bullish patterns have not held but equally bearish patterns haven’t either. When, for example, we have a bearish and bullish pattern visible on the $SPX and $VIX (which we have) we do have to step back and look elsewhere. For me looking elsewhere has been the weekly charts. Nobody is highlighting them here. Everyone is still fixated on the shorter timeframes.
None of us know yet if these global indices will head into a bear market. It seems obvious right looking at Fangs. Clearly if this is indeed a major top and looking at the monthly charts we can assess that they have plenty of room to go down but equally we can’t jump from the daily chart to the monthly chart. Hence why i’m watching these weekly charts.
Also we can’t ignore that considering these Fangs and banks and other large momo stocks have been brutalised yet the $VIX is tame. I would have expected to see a $VIX 40 handle by now and we haven’t.
Now this can mean 2 things:
First being there still isn’t real fear despite stocks being sodomised. Why not? Well it could simply mean what we already know and that’s these stocks just needed to cool off simply because they were in stupid mode.
Or secondly it could mean that the $VIX is quietly holding and consolidating here and gearing up to rock and roll next year.
My take FWIW it’s a bit of both. The bigger question is if we do head into a bear market next year, how low do they take us? I can see a 50 target on $VIX.
For now though we have to look at what’s directly in front of us. The end of the year is upon us and markets look sick! Trump will surely be looking at this. I suspect he’s not going to want to close his half term out with his precious markets ending on a shit note.
But i’m not here to offer my opinion on Trump or the political circus that surrounds us all. Clearly markets are not happy. Hedge funds are under massive pressure, sectors are in bear markets and Europe is hanging on by a thread.
What i am here to do is find waves in this sea of uncertainty no matter how uncomfortable they seem. No difference to that 2600 low scare we recently had. The mission with these markets has always been to extract money out of them. This year IMO is the start of large waves and next year will be nuts also.
I’m looking for a nice swing of 200+ handles again and i can see this set up emerging.
First of all we do have to acknowledge that H&S target of 2585 on $SPX. It’s risk. Will it get there? I don’t know, maybe. We could make a new low or we could make a higher low. 2604 was the low. I would say the buy zone is between 2570 and 2630, maybe even wider. Remember we aren’t in Kansas anymore, meaning ranges are much larger here.
It’s going to be hard to look much lower because of these weekly charts. But of course this will all depend on price etc.
The weekly charts have not been in play for a very long time and most of them are hitting indicator levels not seen in forever. Remember the first KISS is always the sweetest.
$AMZN – weekly RSI near bottom end of range not top end – we’ve only ever been below this recent RSI low once in 10 years.
$NFLX – only lower twice also in 10 years
$FB hasn’t seen these reads since inception
Even the great $APPLE is close to being at levels not seen in 10 years
I could go on $NVDA, $GS, $BA etc etc.
History suggests when the weekly charts line up with the daily charts we see a big rally. When the monthly charts line up with the weekly and daily charts, then we see a bottom.
So I can see the stars lining up for a nice rally, couple that together with Trump and his ego and wham bam we have an end of year rally.
$NDX $QQQ $SPX $DOW daily charts will ALL bring positive divergences on NEW LOWS. As will Europe. So this is my thesis of this being a bear trap here.
I’m watching the $VIX closely as i do believe it still has room to the upside but the message remains. Prepare for a nice bounce.
Catch you on stream.
Note from Sven: I’ve posted a couple of the SetUps she brought forward on her private stream during this time and will add more in the days ahead.
But for now:
All content is provided as information only and should not be taken as investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. For further details please refer to the disclaimer.
Categories: KISS Report