I had an in and out day yesterday, and was not closely watching markets. This morning what I found – other than lousy Facebook results giving markets an excuse to pause, if not terminate the bounce – was the VIX having made a lot of progress to target, which we ID’d as around 19 and the SMA 200.
We have higher upside targets for the indexes, if the bounce continues. Said bounce was due for a pause and this could well be it, before a resumption of the bounce/rally. VIX needed an excuse to whipsaw upward and this Facebook angst pullback is probably that excuse.
- Favored: The first test of bounce players’ commitment in progress, with ultimate bounce highs potentially at or around the targets noted in this update.
- Less favored, but certainly viable: The bounce is ending today. I favor this less because to me, Facebook means nothing. It’s a lousy company with a goofy product, filled with people showing each other their food and in one case – and part of my reason for deleting my account – a woman showing a picture of her husband’s bare feet. :-(
I will try to have a bit of patience today, but with the view that this may only be a sentiment recovery rally in a high risk market with some topping signals, my patience will be limited. The big play, in my opinion, is going to be for a macro change in 2022, not a market bounce.