Overall activity was a bit improved today compared to the last few days but remains nothing to get excited about .. What I mean by an improvement is, at least there was some clean buying out there .. Although buyers were extremely selective, they did pick a few spots where they showed some interest .. SNE CHWY KR MSFT HUN FXI to name a few of the names to see bull flow .. Not seeing any strong signs yet of the pros starting to position aggressively for a larger or lengthier squeeze but we are just a few days into the teeth of this correction .. Short-term sentiment remains bullish here, put/call ratios elevated & they’ve already made quite the dent on intermediate timeframes as well .. We could see the indices dance around this recent low for now, with a great amount of volatility, similar to what we’ve actually been seeing the past couple days .. See chart below for an example 👇🏻
So obviously be careful chasing the high end of the range on any longs & shorting into the lows, especially without sweeper activity confirming the momentum.. There should be ample evidence from sweepers if we’re going to make any major move out of this, up or down .. This type of price action I’m describing makes total sense here too .. With the pop in volatility, we still have bulls who got caught into the highs that need to adjust their equities exposure & add to protection/VIX .. On the flip side, short-term sentiment is completely washed out & the volatility will squeeze out any riff-raff shorts attempting to profit by shorting into the hole .. So what to look for here is, bullish sweeper activity into weakness or bottom of the range for a play on that snap-back squeeze (similar to today’s action) .. As far as any swing or overnight positions, I haven’t done much & currently don’t intend on doing anything here .. We have to understand that right now stockpicking is a waste of time .. Most names are highly correlated to the overall indices in this type of climate .. So, in the meantime, I’m keeping a close eye on what names they continue to come back for into weakness, show some real commitment.. hopefully we’ll have a solid list of names to go to as intermediate-term sentiment starts to shape up.. So the moral of the story here: stay quick, remain selective & for you swing traders out there, remain PATIENT .. The reward for your patience will come once the dust finally settles & sweepers start to flip around some serious buy tickets ..