Market Commentary: SPX Today

Mar. 23, 2021 7:56 AM ETInvesco QQQ Trust ETF (QQQ), SPX, IVV, VOO, SPYPSQ, SQQQ, QID, VIX

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ETF investing, Momentum, Long/Short Equity, CEFs

Seeking Alpha Analyst Since 2016

Always fascinated with the financial markets since I was young, I attained a finance degree with a minor in economics from a top-seven business school. A voracious appetite for financial knowledge meant that I spent more time with my professors working on graduate level work outside of class as I had more interest in cubic spline regression than revisiting the "time value of money" as a topic. I worked in the financial services industry obtaining my Series 6/63 and finally my Series 7/66. I left the industry and started a capital leasing firm which I ran for 12-years before selling the company in November of 2016. My investment styles are varied as I commit different portions of my portfolio to different strategies. I engage in momentum trading, dividend growth investing, sector-rotation, long/short pairs trading, and derivatives trading.

Summary

SPX Narrow Band Closing Range: 3913-3968.
SPX Broad Band Closing Range: 3871-3996.

Just a quick blurb today, keeping it short and sweet. Well, Mr. Market adjusts quickly. All those /ES calls I bought and slowly sold off through the afternoon became fairly valued according to my model. What I thought might take the week took about a day. That's fine but we're back to no real edge buying or selling volatility here just that fast.

With a quick look at the indices, the NASDAQ (QQQ) looks sickly. From the technical perspective, it couldn't hold a breakout of the downward sloping trend line. That's not a bullish look. If you're betting directionally, that may setup a nice short play on NDX, NQ, MNQ, QQQ, or if you're in an IRA an inverse ETF like (PSQ), or a leveraged short choice like QID or (SQQQ). Let me be clear that none of this is advice, it's only information and may be used for educational purposes.

The SPX itself is a little healthier but remains in a trading range. No big breakouts happened yesterday.

I did short some VIX yesterday but the big question of "how low can it go?" still looms. I am emotionally bullish on VIX but there is plenty of liquidity in the market at this juncture and no reason to expect any large spike in VIX in the near-term. I wouldn't expect much of a signal out of VIX on an up move until we're in the SPX 3850 range and especially 3800 or lower. Otherwise, you should be able to just safely trade the noise or ignore VIX altogether.

That's it for me today.

Happy Trading!

Analyst's Disclosure: I am/we are long SPX.

I am an active trader and may take a long or short position in any instrument mentioned at any time.

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Summary

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