I wonder if markets are finally ready to top…
1. The Fed doesn’t want to do anything major before the election so they aren’t accused of taking sides.
2. It seems increasingly unlikely that any pre-election stimulus will pass. This will look bad in the next 2 months.
3. I watched some of both conventions and there is significant fear being spread by both sides of the other side winning.
This fear will grow to a peak in November, probably before the election but possibly after if we have the uncertainty of a close & disputed result.
Add to that the diverging advance-decline line and waning momentum we’re seeing combined with crazy bullishness on the put/call spreads.
This selloff will likely be a good buying opportunity as the fed will undoubtedly juice markets more by early next year.
I have plenty of puts in IWM (Russell 2000) and EEM (emerging markets + China). With the big stock splits tomorrow it might an opportunity to get an affordable put on TSLA (and maybe AAPL as well).