Trade Idea (Longer Term) SPXU Long

With the pace the SPY is deteriorating, it's hard not to throw SPXU (3x short SPX) out there as a potential long candidate to play SPY downside, there's other options such as shorting the SPY without leverage or using SDS (2x short SPX) which gives you short exposure even though you go long, just like SPXU (SPY would be the only true short and has no leverage).

Here's specifically what I'm talking about, many of these charts are closer views to show the recent deterioration, much of it since last week's F_O_M_C (6/18)
, so they don't give you the true longer term picture, however I did post a complete set of SPY chart updates yesterday that give you the longer term , "Big Picture"...SPY Multiple Timeframes

SQQQ (3x short QQQ ) which is one of the trade ideas I brought up yesterday would be very similar to SPXU (3x leveraged short of a major average), the difference being the component stocks in each average, QQQ leaning more toward tech.

 This is the 4 hour, big picture view, I know it seems hard to understand, but this is a market like no other except maybe the 1920's pre-crash, except then QE was used to positive economic effect, this time it wasn't, the story ended badly back then despite the economy going from recessionary to the "Roaring 20's", I suspect this time will be no different, other than the fact the Dow 3C charts from now vs. 1929, are much worse now.

As far as the actual distribution, as you know it is my opinion that QE was a stealth bailout for the banks and large Wall St. firms who could not have exited all of their positions when 2007/2008 hit like a hurricane, for 5 years we had a bull market that went up the stairs, for 18 months we had a bear market that was more like an elevator erasing all of the bull market gains and then some, most of it in 8 months. So this chart would not be surprising as the F_E_D gave the banks a stealth bailout with QE acting as the Bernanke put, allowing large firms that commonly carry $1 billion dollar positions (single) to exit them and get short (selling and short selling both come across the tape as selling) in to market strength-STEALTH BAILOUT, the BAC net seller/buyer charts released would confirm the 3C chart above...

Note "Institutional" net selling and dates, it never stopped from 2007-2008, but accelerated around 2011/2012, the buyers? Retail in green, picking up buying activity just as Institutional clients were picking up selling activity.

However we are looking for timing, this is why I posted the Gold post, the 10-year benchmark rates post showing 2014 looking the same as 2007 and the 2011 crash as well as the logic behind inflationary fears and why the last FOMC last week would exacerbate that which is seen in the SKEW posts from yesterday.

 The 3 month range was so obvious, it had to be taken out with a proportional head fake move, we were expecting this early May and had even looked at "Hitch-hiking longs" until we got to this area where we could sell short in to price strength, that was followed by what we assumed would be the mechanism to start the move, the mid-May bear flag with accumulation (an oxy-moron that told us something was going on and it was likely a kick start to a head fake above the range).

Look at the 3C trend form A to B, but more importantly, at the expected proportional head fake range, this is a huge increase in 3C's downside Rate of Change (ROC).

 15 min chart showing how little the SPY/SPX has really moved, however there's been a lot of movement in 3C which we know is very common in "Ranges".

This is the more recent deterioration since the FOMC, but also specifically today on a weak head fake move (short squeeze), each of the last several short squeezes have been weaker and weaker by almost any measure, TICK data, price movement, etc.

Today's deterioration is extreme.

 To highlight the above statement, look at the migration/trend of the 2 min chart for the SPY today, leading negative in a big way in a single day.

And the 3 min chart's recent trend since the FOMC at the yellow arrow, this is what we suspected was a typical F_E_D knee jerk reaction, 3C seems to do a very good job confirming the knee jerk reaction and how bad it actually is as well as what it was used for. Today's deterioration only is quite impressive as well.

I'd say SPXU is at an excellent price point entry, furthermore, you can put a stop really just below so it's also at a very low risk area with quite a bit of upside (reward) potential.