ES channel high hit - time to risk off for the short-term

11 Jan 2021

The market internals are very strong right now via breadth such as the %above 200MA causing very shallow pullbacks and a stairstep higher grinding move in ES. Currently, however, price is at the channel high. VIX expiration is Wed morning, and the next VIX futures contract is almost two points higher. In addition, this is the opex where the last of the election options hedging falls off which will take away a significant influence of positive flows (as dealers buy back futures as the options they sold decay, check out Cem Karsan on twitter for more detailed analysis on that.) Add to that extreme long positioning especially by the retail crowd and you have the recipe for a potential downdraft. Caution from here. Current sell area is the 3777, risk off below.

13 Jan 2021

Trading ditutup: stop tercapai

Turned into a bull flag instead of a retest of the main channel low. Along with Equity Put/Call readings and VIX, the move out of this bull flag appears to target 3900ish. In any case, this short did not work out and it's quite possible that a sharp move upward may be upon us.