I am a little surprised at the move on NVDA on earnings. I touched on it briefly last night, but it seems that the attitude towards tech may be souring, or extra liquidity isn’t able to keep this propped up anymore.

VIX finding support

The VIX has maintained support at the newly drawn breakout line. I prefer this drawing to my original because it’s confirmed by over three weeks of price action. If the VIX continues to rise above 15, this may be the beginning of the real correction the market needs.

Major correction potential

I’ve been pretty vocal about a major doom scenario playing out (SPY visiting 450 or lower). It seems that many have forgotten the untested strength that propelled SPY from 400 to almost 600 in less than a year. This kind of market action doesn’t go unchecked forever, and the market has a long way to fall before any real support catches it.

Adding more short positions

If SPY stays below the rising wedge tomorrow, 555 becomes my new top for short positions. When the market begins its correction, it might be hard to rely on bounces to add. Market sentiment has radically shifted in favor of bulls for the last few months, so each bounce may signal “recovery” to those who have become complacent in buying the dip.