The call the President’s working group the Plunge Protection Team, presumably because it protects the market from plunging. It think they’ve got it wrong. What it really does is protect plunges in volatility that, in turn, trigger algos to buy stocks.
The VIX smackdown that Mnuchin’s Plunge Protection Team unleashed on December 24 has now reached 65%……with the latest overnight plunge taking out both horizontal support and a key Fibonacci retracement level.In the process, ES is making new highs after breaking down from its rising wedge and a rising channel. It’s a wonderful gimmick that almost always works as long as the other factors are on board — an important caveat on days like today.
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