Fade Trade

These kinds of trades are getting very dangerous and speculative as the closer the market is the the edge of the cliff, the more unstable and unpredictable it gets. You saw SKEW already hit a new high at 146, which is just about as extreme as it has been, there are a lot of big players very nervous out there which is what that SKEW reading is indicating and it has everything to do with the F_E_D as it started this crazy rate of change to the upside to hit new highs the day of the F_O_M_C last week.

In any case, think of the market as a thinning ledge, the further you walk out, the more unpredictable it becomes (for longs) and at this point , as nervous as smart money is (reflected in SKEW and market breadth), the off news story like the G-20 sees "Excessive risk taking", which was a comment that was hedges with something about growth, kind of silly, but in any case, something as mundane as that when the BIS said the same thing months ago, is being taken seriously by a jumpy market.

That being said, there looks like an opportunity to fade this morning's weakness as the last update was starting to show. Personally my choice would be some weekly leveraged IWM calls, it just looks better than the SPY/QQQ.

 IWM 2 min progressing to leading positive

 IWM 5 min progressing as well.

The intraday custom TICK is improving.

As for the IWM, this 5 min chart with a 50-bar moving average is likely where action will pick up, a lot of day traders follow the 5 min 50-bar and we are pretty close to a cross over.

Again, this is a very speculative short term fade trade.