Recap Start of the week held up well around the close. Y+1 upside break out gave us the Y+2 target. Y+2 tagged and a pullback started. Dow gapped lower to its midpoint at the time and took off. That surprised many and induced the end of week breakout until 100% absolute range expansion was reached. Closed the week above Y+2 and near week high.
Outlook The first part of the rally was not a surprise at all. That has happened before in post-NFP week. What was surprising was the strength in the 2nd half of the week. VIX was strategically smashed lower to induce buying of the indices and their components. Conspiracy?
Normal play after wide range week is consolidation play around B+1 at 50% range.
Just like what I warned last week, this week could be a repeat of the violent price actions.
Lawrence's Comment
Recap
Bearish bias on euro pays off. Euro could not hold previous week close and fell back down to Y-0. Not much bounce was observed when euro continue to drop ...
Dow 30 Feb 17 to Feb 21 Outlook
Lawrence’s Comment
Start of the week held up well around the close. Y+1 upside break out gave us the Y+2 target. Y+2 tagged and a pullback started. Dow gapped lower to its midpoint at the time and took off. That surprised many and induced the end of week breakout until 100% absolute range expansion was reached. Closed the week above Y+2 and near week high.
Outlook
The first part of the rally was not a surprise at all. That has happened before in post-NFP week. What was surprising was the strength in the 2nd half of the week. VIX was strategically smashed lower to induce buying of the indices and their components. Conspiracy?
Normal play after wide range week is consolidation play around B+1 at 50% range.
Just like what I warned last week, this week could be a repeat of the violent price actions.
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