The price action continues to gyrate in historic fashion. Those calling out the unusually calm markets of years past, are reveling in this roller coaster market.
The $SPY ETF this week has gone haywire, making moves minutes what usually takes days and/or weeks.
The inverted yield curve has everyone calling for a recession. I don't see many calls for fresh record highs. I do see more Hindenburg Omen and other bearish confirmation pieces.
Despite the unusally wild swings, this pull back from record highs feels no different than the other nasty pull backs we've seen over the years.
In the midst of these pull backs and spikes in volatility, it feels like the top is in. It feels like prices are ready to collapse further. And they very well may. However when all is said and done, the market has always headed to new record highs.
Recession or not, I don't think this time will be any different.
When will we see a return to calmer markets?
Let's look at two levels for the $SPY. Strong support remains on the $SPY at $282 and $277. A break of both will send prices careening to channel support at just under $260.
Have we already seen the lows for this pull back? That is a possibility as well. Although if you recall back to August 2015, we had some nasty chop early in the month and then a flash crash at the end of the month that marked the bottom. It took most of the fall in 2015 for the dust to settle, setting the market up for a huge 2016.
Going forward a good sign the market has bottomed will be a VIX moving lower under 20 and ultimately under 15 and a swift reversal lower for TLT.
TLT hit new record highs this morning over the $147 level.
Today is going to be another wild session, with prices gyrating once again. If the bottom is not in yet, a break of $SPY $282 sets up $~277 which will likely offer strong support, however in that scenario we might not find a bottom under $259 or so.
Either way this market will find its way back to record highs, triggering many more Hindenberg Omen and bearish top calling articles with each move higher.