Ok. I’m cheating. I have a secret weapon. My muse. Mella. She of the Big Short II fame. Like all of you we’ve been analyzing where this move may bottom or at least find massive support and I’ve discussed possibilities in Fear and tracked it in The Comeback Kid.
But it helps having a magician at your side. Mella had retired last year, but has came back to Northman Trader to help support subscribers while her big $VIX 90 call was coming to fruition and markets are in crisis mode. She has since stayed on and will remain with us during these challenging times and crisis.
Having swung to big time bearish she was also looking for a turn in markets as everything fell apart last week.
And she finally gave us advance heads up as well for a major counter rally.
The chart below you’ve seen in the Big Short II. It hasn’t changed, it’s just being tracked, but it gave heads-up notice of support and Mella offered this with view of a big rally to come off of that “RIP bulls” support:
Heck she even suggested a retest of overnight lows for a massive move back to 2600 by adding upward arrows to her chart.
That view did not waver as price indeed hit support:
And boom, the counter rally started.
Ripper rally indeed.
And the big follow through today:
Be smart indeed, hence a great opportunity to de-risk and lock in some gains. A 17% rally move in $SPX in 3 days doesn’t come very often. In fact it never comes, it’s the kind of move that happens in bear markets, a classic bear market rally, i.e the 1929 Redux. And the journey continues as you can see in her chart that even more risk remains in markets despite a big counter rally having emerged from the charts suggested it would.
Whatever you want to call it, it was a monster move. With advance notice no less. Thank God Mella is back!
