August began on an especially bearish note, with the SPX swinging from 5566 to 5410, and settling -75pts (1.4%) to 5446.
Thursday’s candle was especially bearish engulfing, eclipsing the price action of the prior four days, and strongly bodes for lower lows.
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Increasing market drama
The past few weeks have seen volatility climb from the 11s to 19s, as we appear to have a key equity top ahead of the election.
I’d especially note VIX monthly momentum, which turned positive in July, and is set to be increasingly positive into the Fall.
Between now and early November, I have to expect at least a few of the ‘wild cards’ to play out. If correct, we’re set for some very dynamic price action.
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