You may want to fasten your seat belts because things are going to get volatile.
Few traders are seeing the falling money flow into the upward move. The falling money flow suggests momentum is dropping as we head into the big Fed meeting on Wednesday, July 31, 2019.
With the VIX trading around $12, it’s a compelling play to go long the VIX into next week.
Next week’s Federal Reserve decision on interest rates, another big release of second quarter earnings results, and a fresh headlines about U.S. and China trade talks are all contributing to a possible upcoming spike on the VIX.
It seems like nuts to bet on a swing move down in markets as we head into the first rate cut by the Fed in years but that’s what the technical charts are showing could happen folks.
Is anybody still doing the FOMO trade? I’m thinking there’s less fear of missing out going into next week. We have an overvalued market hitting all-time highs and the Fed having to admit that the economy is weak enough for a rate cut. This does not seem like the time to get aggressive.
The S&P 500 is up over 20% for the year. How much higher does everybody think it’s going to go? I willing to venture that many traders are happy with booking profits near 20% for the year instead of staying exposed and risking giving back those profits. This is why I think we’re not really in a FOMO trading environment right now.
We could see a 4% pullback in the market in the short-term and then we would be looking to go long technology and industrials.