Commentary

10/30/20 Heading Toward YTD Break Even

If you don’t just put your money in the market and forget about it like a normal and happy person, it is pretty important to avoid crap like this. The action around here can still be bottoming, but SPY is a bad day away from the 319.80 recent low. If that is penetrated, then 310 is an obvious target.

SPXL is interesting to compare with SPY because of the more serious nature of the technical damage even though the two charts are quite similar. SPXL is already below the 52 week SMA. Instead of it being at the top of the nasty Feb 24 candle it is at the bottom. It has already penetrated it’s own the key resistance area, while SPY is hanging above.

If SPY falls to the 39 month SMA at about 280, the April and May lows are around 270. I’ve been wondering when the Fed might step in, assuming this plays out in lame duck time or worse. Assuming we get down to 280 on SPY, SPXL would probably be close to it’s low for the year.

Definitely an advantage for the fear side near term.

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