S&P – Yesterday’s Swing and What Next

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Overview:

The market swing of 1000 pts yesterday and 120 pts on the Dow and S&P respectively there is some evidence of a market reversal in the form of order flow.  This is the perfect example of how context and order flow can be used to spot a potential reversal.

I also see in many groups “the herd” using ETN’s like SQQQ UVXY SVXY and others.  These are hedging instruments for a very short time period.  Thinking you are going to crush the market using velocity ETN’s is nuts, and the margin requirements required to really make money at them is ridiculous and the risk is high.  There is a method to make money, but you have to be able to take a lot of pain financially in the short and mid term.  Forget about get rich quick schemes and focus on base hits.

Also an ETN is NOT the same as an ETF so understand what you are trading.

 

 

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