The sell-off is not completed

Investors must now price in additional tariffs on China, and further conflict going forward with regards to China.

We won’t have a trade deal anytime soon. It’ll take a while for the repricing of assets to trickle through the market, just like it did back in May.

As I mentioned earlier, I expect IWM to pullback 5-7% since it broke the $153.50 support level earlier today.

SPY is a little trickier for me. It tends to whipsaw in price when volatility picks up, possibly due to algorithmic and HF trading. I think we see SPY revisit $285 range before the end of next week (Aug 9 expiry), but it’ll be a rocky ride.

I think VIX will also whipsaw next week, seeing a range with a low 14.7 and all the way up to 23.5. That’s just my guess.

However, a quick resolution on China trade would negate this scenario.

Author: Trader Court

CPA first, pivoted to python programmer focused on data science which I apply to my own stock and options trading. View all posts by Trader Court