Logo
NVSTly
Updates
Resources
Analysis
Educational
Miscellaneous

The Sh*t Show(off)

by ImDerekD • Mar 1, 2022 • 29
edited by rich on May 1, 2024

To some, I’m sure it’s fair to say the first two months into 2022 have been eventful in one way or another. If I was as dedicated of a writer as, I guess I could be, this would be my third post since Dec.2021; either I lack the dedication, or I dissent from those who are taken by surprise over the chaos we’ve yet to see. Regardless, there’s more than a few things to reflect on! First of all, Merry (late) Christmas & Happy belated New Years. Despite the anticipation of Fed rate hikes in the upcoming month(s) for the first time since 2018, let’s take a step back in time. Since the recent provisions of a global-arms-race (“tangible nuclear threat”, for short) we now face is as fresh as the last HOMYF episode, let’s go back a biiiiiiittt further. Forget about the -50% haircut in Russia’s stock market, & think back to a time before “the worst start to a trading year for the S&P in nearly a century”, OK? — Keep going. Before “Emergency meeting(s)” between the Federal Reserve / NATO / UN / & WH Briefings became regularly scheduled events, before $100 oil, before New York’s peak of Omicron cases, before Betty White was laid to rest (RIP), we really did have everything, didn’t we?

If you’re a glass half full type of person — the world hasn’t stopped spinning. It spun before The Great Depression & WWII, it spun during the Global Financial Crisis, COVID 2020, & its spun ever since December 15th, 2021. Even if a “planet killer” sized asteroid was destined to obliterate our value of times & times of value, the same goes. Sure, reality as you know it comes to an un-deniable standstill; but apparently, as long as both eyes are closed, that glass is as full as you see it to be. Right? 

 

Excuse my excuses, but, I dealt with the same writer’s block I had one month ago (Jan.25.2022) before deciding to say “F* it, I’m not doing this mid-week HW”. Now that we’re here, I’d like to cover some lost ground.

“*Assuming one chooses to ignore 2000–02 and 2008”, of course.

 

As much as I appreciate the perspectives of those who see market internals in aspects different than my own, I appreciate the “bigger picture” much more; a movie is only as good as its ending. Since we’re nowhere near the end of this one, it’s best for those who’ve been violated by the market already to further refrain from being a nuisance to the rest watching. There’s more to the market than what meets the naked eye — even less of which is fully comprehensible through data alone. Late January (24th-28th, specifically) is an important period to acknowledge. Besides the seemingly over-scheduled fed meetings resonating with (yet another) extreme/oversold/lowest/break of: 

{INSERT TECHNICAL INDICATOR HERE}, there was much more (or, less?) to major indicies than I know how to explain myself. 


Now, I’m the furthest thing from an “expert” on Fed policy. Not only that, but even the topic fails to guide (or mis-guide) my perspective of market internals entirely. Although correlation may not inherit causation, this is the second (would be #3) time since 12/15/2021 having to emphasize the disparity of a healthy market vs. the shit show US indices have turned into. Since (if you remembered) 12/15/2021 was the Fed’s most recent meeting deciding 2022 rate hikes, it truly begs the question of whether or not this is a coincidence, or a flagrant attempt to save the market by apparently killing it first. Things get a little fucky starting Jan.24.2022- keep that “record # of shares traded by SPY & QQQ” tweet in mind. 

 

 

All three pictures, clearly indicative of massive volatility. “VSR” being the ratio of intra-day (avg) volume to the cumulative flow that drives price movement (Intra-day AvgVolume / volume taken to drive price $.01). Without going too much into detail, a low “Qratio” insinuates higher volume than average, while a low “sneakR” higher volatilitythan is needed to suffice the volume driven from it. In all 3 examples above, their values are all derived from volume. Despite the obvious spike in volatility (“VSR”), the EXTREME lows in only 2/3 examples beg the question: Why the divergence? Even on a normalized basis (indexing volume / VSR)- does peak-COVID 2020 do what we’re seeing, justice? 


It’s an outlier in & of itself, the volatility we saw this past week. Let alone, for monthly OPEX (sure, quadwitch is more fun). Did you know: The NASDAQ as a whole has only seen a rally as large as this past Wednesday (12/15/2021) 3 other times since 2019?! All of which, those instances happened amidst the March.2020 havoc. You could cut $QQQ’s +2.76% rally from 2PM-4PM in HALF, and only find 7 other days that make the cut. ~ 12/15/2021. 

Now listen, I’m the furthest thing from an “expert” on fed policy. OK. I’m not a weatherman, either. But if the local weatherman added the “with mere certainty,” clause to the end of his “an asteroid is going to hit Earth tomorrow at 3:19PM,” claim, I’d sh*t my pants. Twice. 

All I’m saying is, I’ve seen this before; With mere certainty, it doesn’t end well. 

Out of every possible bearish scenario leading to even a market “correction”- this is the most un-natural. It takes the most simply-rational aspect of market balance & curb stomps it with a jack-hammer. Before the 12/15/2021 fed meeting, there were 9 instances where the “QRS Index” variable referenceed has printed a value ≤ 0 by the end of a trading day. 867 total (including half) trading days, 3 ¹/² years worth of data, and the rarity of such an occasion returns a < 2% sample size. I’ve pointed this out in every blog post I’ve made that even mentions the QRS Index, but I’ll mention it once again. 

| —Date | —ChgOpen | QRS Index |
+ — — — — — — + — — — — -+ 
| 10–18–2018 | -1.05% | -117.27 |
| 10–24–2018 | -2.97% | -480.46 |
| 11–14–2018 | -1.46%| -268.29 |
| 12–04–2018 | -2.83% | -826.94 |
| 01–24–2020 | -1.11% | -165.63 |
| 02–14–2020 | +0.04%| -949.07 |?
| 03–16–2020 | -0.55% | -104.87 |
| 07–23–2020 | -1.08% | -10.05 |
| 09–23–2020 | -2.5% | -119.54 |
+ — — — — — — + — — — — +

These 8/9 instances were all preceded by intra-day selloffs in the ballpark of -1.50% on average. Before and afterCOVID hit the market, Valentines day of 2020 was the epitome of an outlier; the outlier of outliers. Literally. If you think 2020 was bad,

Welcome to 2022.

Over the past 2 months (since 12/15/2021, specifically) we’ve added five additional instances resulting in the #2, #4, & #5 lowest QRS Index values I’ve seen. Keep in mind, Valentines day of 2020 saw the COVID crash long before you knew what a “limit down” day looked like. The same goes for the last fed meeting of December 2021. If at this point, your glass is still half full, allow me to top it off. 

No comment.
Kinda sketch
Pretty sketch 
Sketch af 
Are you fucking serious?

As much as I’d love to talk down the optimistic bunch from the cliff of their own demise, I won’t. If you’re someone who, for whatever reason, is still thinking about “buying XYZ with both hands at this discount!” , or “OMG, 200SMA! ❤,” I’m just glad your glass is full- regardless of how bad hallucinations get from the dehydration may be. 


 

There’s enough fuckery in today’s market that I could (really) go on (…..really). Since this post will exclusively be on nvstly.com/blog (“analysis”)- If my writing referenced to 12/15/2021 isn’t already on the page, you can read it here. 

https://medium.com/@ispyflow/no-color-of-any-rainbow-gets-confused-within-a-black-sky-f51d539e8c1a 

If you’re already apart of NVSTly group- feel free to ask questions whenever about whatever. Whether you’re a FinTwit furu hosting their own Discord Sub, or you’re down to join the solid team behind the works of https://nvstly.com- you can join free here https://nvstly.com/go/discord. Until next time:

I’ll see everyone on the other side.

 

Logo
NVSTly
© 2021-2024
English
Platform
Open AppBlog
Policies
TermsPrivacy
Check out our socials!