February 25, 2022

Volatility Reports 2/25/22

Headlines after the close Thursday “7 of the 11 sectors closed higher. Tech led, gaining 3.42%. Consumer Staples lagged, dropping 1.72%.”

The full-time providers of market information are all in unison after the recovery Thursday. A few point out how sentiment is one-sidedly bearish, which is bullish from a contrarin point of view. but all of them assuming they are professionals as they post this content full time, are bullish.

1. Russell 2000 digging in at the AVWAP from COVID lows for the 2nd time this year. Along with momo divergence, finally getting some signs of a bottom $IWM
2. Neutral Sentiment Plunges as Bears Move Back Above 50%
3. The big difference between today’s reversal and the reversal on the 24th can be summed up in one word… PANIC!  We saw it today, but not on the 24th.
4. S&P 500 Information Technology 1D  Bullish divergence is displaying at support.
5. Investors Intelligence Bulls minus Bears is now at 1.2%, nearing those extreme pessimistic levels where we’ve seen bottoms in stocks since the mid-90s, with the exception of 2008.

Also, one thing that has become such a glaring insult to a trained market analyst, strategies and trader is the spitballing that is chronically posted, and to what end is unclear. But #3 above, there was no panic yesterday, not even a mini-panic.

What the good ones know is it’s the consensus of the purported professionals on how one builds a contrarian case.

Also, the bulls are in retreat. Here is a chart posted with the head lines “RSP holding the line.”  The RSP is Invesco’s weighted S&P ETF. But what is clear is how the index broke support, and now he has had to retreat to the next “bar chart” horizontal line. The keyword is the bulls are in “retreat.”

The brief MarketMap™ -2022 Issue#7a sent to members before the open suggested the lower gap open into our COT time window could lead to a reversal on Thursday or Friday.

Yesterday on the opening weakness 1/2 of the bearish option positions took profits and a number of the ETFs some had better than 25% profits and a few laggards were disposed of off.(see Trade Markets App.)

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Bottom Line and Strategies going into today:

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