Stocks tried to rally on Sept. 1. Inflow day started strong but faded into the close to end the day flat. The VIX really may have been the key here as there was some decent put volume trading on the S&P 500 that rolled through later in the day, and that seemed to give the VIX what it needed to push higher, sinking the S&P 500.
The VIX also found support at our uptrend line that has been working fairly well since the beginning of July. That has really been key and has in the past marked a turning point. If it continues to hold, it would suggest a higher VIX in the days ahead, potentially back to the long-term downtrend around 20.
S&P 500
The chart on the S&P 500 was looking sort of iffy up here, especially if the VIX continues to climb. The pattern on the 10-minute intra-day chart looked kind of double-toppish. Unfortunately, we won’t get confirmation until the index falls below 4520. A natural place to revert to is at the 4,440 gap fill.
Amazon
The 10% run-up in Amazon.com (NASDAQ:AMZN) really appeared to be entirely attributable to a gamma squeeze. The signs were there, rising implied vol and call volume, falling skew. It appeared the squeeze was over, and given where the shares are; we should see a reversion lower.
The 3,520 levels appeared to be strong resistance.
Square
Square (NYSE:SQ) was getting closer and closer to breaking the uptrend. The stock moved up on Monday and gave it all back on Tuesday, doing nothing on Wednesday. The stock is probably dead money until the Afterpay deal gets completed. They are using the stock as currency, which is dilutive to existing holders since more of Square’s stock will be issued.
Zoom Video
Zoom Video Communications (NASDAQ:ZM) did not have an impressive day after falling nearly 17% Tuesday. All it could do was gain 50 bps on Wednesday. If that was bounce, the stock has a major problem coming at it. It might get to $230 really soon.
