#ES_F - Distribution, Max Pain Trade, and Downside Gaps

On the monthly, this looks like a giant distribution pattern with the UTAD "Test" TL holding at resistance and the 61.8 Fib. (As of now) Is it possible we go higher? Sure.. Calling the top is difficult. As we all know, the market likes to retest open gaps. I've notated all the open gaps along with key fib levels and support. At a macro level, we know pensions are insolvent, banks and the entire financial system is over leveraged.

The Max Pain trade is the perfect storm. Here's the set up..

1. Record net long speculators in the market

2. Record net long speculators in oil

3. Record net shorts in the dollar

Anytime, I hear record positions, I think "extreme," and how can "they" make the most money? "Think like a crook."

This set up, the max pain trade rips the dollar and causes massive short covering. The parabolic move up of the dollar crushes oil, the market, gold, and silver.

Voila.. Max pain trade where "they" make the most money and causes an implosion in the market to reset.

I'm sure most agree, 2008 the US debt was bad. We had the opportunity to endure some pain, but correct it. Instead, we kicked the proverbial can down the road. Therefore, we must go lower than those levels. I keep hearing these talking heads saying, "we won't have another bear market." I 100% agree.. IT WILL BE A CRASH. When? Not sure, but I will point out the massive accumulation of volatility products.

If and when we fall, here's some levels to watch for.. Call me crazy, but that 904 open gap on ES is the ideal spot.. IMO