SPX: Sitting on the 1274 Fence

The SPX closed today today at 1267.38 which is on the downside of the imaginary 1274 fence created by the lows in January and March. The bulls had a much better argument that a sustainable rally was brewing yesterday when it closed above the fence then they did today closing below it. The price on the SPX daily chart is also under the 30MA again so chalk another one up for the bears.

How the market reacts to tomorrows economic numbers and more importantly how Friday closes will give us the next piece of our technical puzzle.

On the short term SPX daily chart we have a higher low and the market will need to close higher then 1285 to give it a higher high. It would be much better to see a close over 1290 to feel confident about the higher high.

Keep an eye on that 1290 area, because if it breaks out above that area, there is little to resist the bulls until 1315 to 1320. We may get another one of those quick intraday rallies that catches most off guard. The rally may come when it's least expected, so watch that 1290-1292 closely.

Bias is mixed now as we have conflicting technicals. On the bulls side we have a higher low, but on the bears side the price is under Jan / March lows and it's below the 30MA on the daily again. As a reminder, the intermidate trend is firmly down, and any bullish rally at this point is likely to build out a lower high on the weeklies.

SPX Daily Chart:

NDX: Review of the Weekly Chart

The NDX has a very choppy daily chart, but when we pull out to look at the weekly it shows that the NDX is successfully attempting to put in a short term bottom as it continues to form a higher low on the weekly chart.

A realistic upside target for this current rally might be the 1900 area.

NDX Weekly Chart:

SPX: Strong Day

The SPX finished up strong to create another 20 point solid white candle on the daily chart to close at 1284.26. Next target on the upside is to conquer and hold 1290. Of note, is that the SPX "CLOSED" above the 30MA on the daily chart for the first time since June 5th.

It may chop sideways for a while as it attempts to hold and test the 30MA so be prepared for some whipsaws. Just be aware of the 30MA and that the price will likely hang around that area for a while. If it rallies up quickly, be prepared for it to pull back and test the 30MA again.

With today's close the SPX has confirmed a "higher low." The next few days of trading should tell us if the SPX is able to create a new "higher high."

SPX Daily Chart:

RUT: Holds Gains

The RUT had a volatile day, but closed up 4.11 points after bouncing off the 100MA on the daily chart.

After yesterdays huge white candle, this pull back was healthy in the bigger picture of the RUT continuing to move up. 720 will still be an area of resistance it will need to clear, but if it can get up above and hold 720 then the 200MA at 727 then the 740 area would be the next target.

RUT Daily Chart:

SPX: Channel Bounce

The SPX got a bounce of the bottom of the channel we drew a few weeks ago. The slow grind up continues.

SPX Daily Chart:

RUT: Bouncing of the 38.2%

Nice bounce off the 38.2% today. Seems like the bulls came out of hiding today and we'll just have to see if they show up tomorrow.

RUT Daily Chart:

RUT: Bulltards Retreat

Was it yesterday or the day before that I said the RUT bulltards are like an undisciplined runner who sprints the first 5 miles of a 26 mile marathon and then falls down at mile 7? ...Well they hit mile 7 today.

Not much to be said other then the 6 day rally ending with a topping tail that was giving us a pretty strong indication that the momentum was fading. Today the sellers showed up at every intraday resistance level to keep taking it down. It was a really good text book example of how old support became new resistance. (See chart below)

RUT 5Min Chart: Intraday support became new resistance



On the Bullish side, this pull back today was only about a 30% retracement on the big 6 day rally, so in the scheme of things this might even end up being healthy for a bigger more up. My bias is slightly bearish for the short term given the engulfing pattern today, but I'm looking for the RUT to support first at 687.50 if it pulls back tomorrow.

On the Bearish side, I see that it could fall some more, but there seems to be some support that should find some buyers 695 area. If it closes below 690 and buyers don't step in at that level then it could be setting up for another leg down. Anythig can happen, but I really see today as more of a much needed pull back rather then the start of new downward movement. Tomorrow will give us another piece of the puzzle.

RUT Daily Chart:

DOW: Rare Bearish Engulfing Pattern

The DOW closed up today to create a bearish engulfing pattern on the daily that engulfs the last 4 days of trading. You don't see that very often.

On the surface it's extremely bearish, but with the current volatility it may not actually mean much on where we go tomorrow since both the bulls and the bears continue to "over-do-it" on the moves up and down.

On the bearish side, it did close below this weeks previous low of 11,387, but that came in the last hour of today's trading and it ALMOST found support there a little earlier. IF it can hold this area a bounce is likely, but if it falls apart tomorrow you can see on the hourly chart that there's not much price support again until 11,100 unless it can catch itself on the 100MA at 11,300.

On the bullish side, this was just a 38.3% retracement of a 6 day relief rally and could be healthy in the context of a sustainable rally to the upside. It has to hold here in this area though.

DOW 60 Minute Chart:



DOW Daily Chart:

NDX: Weekly Spinning Tops

The NDX daily chart wasn't telling us much so we pulled out to a weekly which gives us a better road map. For the last 3 weeks the candles have been spinning tops in the same price area suggesting indecision on direction. The NDX is currently below the 30MA and 100MA on the weekly, but ABOVE the 200MA on the weekly.

You can see on the chart that if it breaks down further it will likely find some support at the 200MA area which also has some longer term trendline support -- that's the 1725 area.

It appears to be trying to put in a bottom, but the pull backs in NDX heavey weight contributors GOOG and AAPL have put a damper on the NDX rally.

The Biotech sector seems to be the only thing keeping the NDX alive right now as Software, Internet and Semiconductor sectors have all fallen hard this week.

Once those three get a bounce we are likely to see the NDX rally from this area.

NDX Weekly Chart:

SPX Daily Chart: Liking the Channel

A few days ago we posted a chart with a upward trend channel that sported the same angle up as the March to May SPX rally. With today's pull back it put it right back in to the middle and there should be some more support just below in the 1245 area.

You've gotta love the unpredictability of the market and large swings it's putting in. Yesterday's topping tail gave us all a clue of what the bias should have been today and the price action confirmed it.

On the bearish side, today's action created a bearish engulfing pattern that engulfed the last 2 days of trading. That's pretty bearish.

On the bull side, the move up needed a healthy pullback and it got one today. If it can hold above the support of 1245 then this area could be the launching pad for another short term rally within the upward trend channel we've drawn.

Note that the price action remains UNDER the 30MA which is still confirming the downtrend.

SPX Daily Chart:

SPX at 38.2% Fib

The SPX hit the 38.2% fib level at 1290 intraday and then retreated to form a bit of a topping tail on the daily charts.

It's still short term bullish, but a close tomorrow below today's low of 1276 might hint of a pull back.

SPX Daily Chart:

RUT Retracement

The RUT only took 6 days to retrace the move back to the 61.8% level and today closed .10 above the actual 61.8% number of 719.09 - RUT closed at 719.19

In the process of today's trading it created a topping tail on the daily chart.

Tomorrow will be pivotal to see if it can buck the tail and go higher or if the topping tail works tomorrow like it usually does and we get a little pull back.

Remarkable retracement!

RUT Daily Chart:

SPX: Looking with Fresh Eyes

Let's look at the SPX daily chart with a fresh set of eyes today and take a look at what it's telling us.

On the long term we have lower highs and lower lows -- bearish.

On the short term, we just put in a bottom, VIX spiked to 30 and the VIX closed up at 21.18 confirming a short term bottom.

Fib wise the SPX has not even retraced back to 38.2% yet, but if the SPX follows a similar grind back up like it did from March through May then the channel might look like the green line channel I put up on the chart.

If oil is tame or if the market can disconnect itself from the high crude prices then the quest of the SPX to go and retest the downtrend line near the 100MA seems probable. (Note: the RUT has already retraced close to 60% of it's move off last weeks lows)

Short term trend is up, next target 1290.

We'll update again tomorrow.

SPX Daily Chart:

RUT: Bulltards in Full Force

The RUT (ER) consolidated at the open at the S1 Pivot for about 15 minutes and then had one of it's largest intraday moves this year. In all, the ER covered about 26 points from top to bottom so the aggressive that got in early and hung in there had a VERY good day.

On the daily chart it blew right through the 30MA and 100MA with the next MA resistance level being the 200MA at 731. There should be some overhead resistance at 720 too, but now that the rallies begun there may be some more bulltard buying before a pull back develops.

In the last 8 months, the RUT has spent only 2 days above the 200MA so this may be some strong resistance. The RUT has essentially spend the last 6 days going straight up with the exception of a consolidation day that only pulled back a few points.

Keep in mind that this move straight up will have little support in the future should the RUT decide to fall again. The RUT sometimes reminds me an undisciplined runner who sprints the first 5 miles of a 26 mile marathon and then falls down after mile 7. Big moves up met with big moves down.

Pulling out to our longer time frames lets remember that we are in a long-term downtrend with a confirmed lower high and we just put in an equal to slightly higher low. Only if the RUT can somehow put in a new high over 770 would we change our bias from the L-T downtrend.

Short term trend is up, overhead resistance ahead but keep your eyes on the fib levels, if it closes above 61.8% (720) then the next upside target is 740 and 760 after that.

RUT Daily Chart:

VIX: It's Real (At Least for Today)

VIX closed at 21.28 and is sitting in the middle of our range.

Looking at the daily chart, it may find some support in this area. To move from 30.50 last week to 21.18 today was a quick drop that took many by surprise including me. I was still waiting for the other arm to drop and give us a 35 VIX before a bottom could be hammered out. Teaches me another lesson on trying to out-think the market.

If this area holds and the VIX bounces back up a little then we're in for a pull back, if the VIX continues to drop the rally will continue.

VIX Daily Chart:

RUT Showing Some Relative Strength

The RUT closed up 4.55 points today to close at 697.63

It's the only index that closed up today.

At the time of this post the ER futures (RUT futures) are down to 692 after some earnings reactions, but that could all change again tomorrow with the pre-market releases of more earnings.

Note that the RUT does have some overhead resistance as it's nearing the 30MA and 100MA on the daily chart. Above those MAs the 720 area should also act as resistance.

Should the RUT pull back on Tuesday I'd look for support at 688 and if that doesn't hold then 675.

RUT Daily Chart:

SPX: Holding it's Ground

The SPX closed flat just above 1260 today, so no pull back yet and no real rally yet.

Lots and lots of earnings this week -- we'll just have to wait and see which way it tilts tomorrow.

SPX Daily Chart:

VIX: Fear Takes a Breather

The VIX has fallen back into our comfort range and so far is adding to the evidence of a short term bounce.

The spike (so far) is not as high as I had anticipated given the severity of things like the Oil prices and collapse of the Bank Index, but the market will move according to what it does and not what analysis or I think. That's why we must always trade what we see in the price action and not what we think will happen.

If the VIX stays below 25 there is a good chance of a sustained bounce here. For the SPX my first target with be the 200MA on the Daily Chart which would be about 1320.

VIX Daily Chart:

SPX: Nice Weekly Candle

Today's post can be summed up with few words as the Weekly SPX candle says it all.

Next's weeks candle will be critical to give us evidence that this is a true bottom or not. We're looking for next's week candle to close above this weeks to confirm the evidence of a short term bottom.

SPX Weekly Chart: Bottoming Tail

SPX Trading Levels

The SPX put in another impressive day up 1.20% to close at $1260.32

Take a look at the weekly to see the bottoming tail forming.

The market didn't like the Google numbers and NDX futures took a bath after hours. We'll have to see how the rest of the market reacts in tomorrows trading.

SPX Weekly Chart:

Bank Index: Impressive, But...

Okay, so the S&P Bank Index had a 22.77% rally today.

But lets look at the chart and see what that really means. Okay, we just got back the last 3 days of ugly selling, but that's it.

The next few days will be important to see if it can hold above this level as any crack below 145 could start unraveling this thing again.

S&P Banking Index ($BIX) Daily Chart:

RUT Bulls Are Back

The RUT had the relative strength today with a 3.66% gain to close at 686.75

If the RUT pulls back tomorrow look for support in the 675 area which is the 23.8% fib as well as about 1/2 way down today's candle. A close below 675 would put it in limbo land again.

RUT Daily Chart:

SPX: Dodged a Bullet

The SPX averted a fall of the cliff today and had an impressive reversal closing at 1245 which is well above the 1220 cliff's edge.

Now the hard part... staying up there.

The SPX put in a bottoming tail Tuesday and today's candle closed well above yesterday's high give this a very bullish set up. It could also be characterized as a bullish engulfing pattern which has additional importance since it's at the bottom of a long downtrend. These are the bullish aspects of today's trading.

Tomorrow the 1230 level will be an important area to hold since that's approximately 1/2 way down today's white candle. A break below 1230 gives the bears a chance to do some more work.

Current bias: Short term bullish

SPX Daily Chart:

Wacky VIX Candles

Both Prophet Charts and TOS Charts posted a VIX early morning bar with a high of 38.84 that really threw me at first. This was just a bad tick, but I am used to Prophet being pretty good about fixing bad ticks and since it stayed there all day it was a bit confusing.

I verified with CBOE that the high was actually only 28.32
http://www.cboe.com/DelayedQuote/SimpleQuote.aspx?ticker=VIX

This paints a different VIX picture then if it really would have had a high of 38.84

The daily charts on the indices look stellar now, but with the recent high VIX at 30 I'd still like to see some confirmation in the next few days before I'm convinced of a bottom. I makes since to hold this support area, but without a significant VIX spike we will need several days of consecutive highs to confirm a bottom here.

VIX Daily Chart with Bad Tick for Wednesday: (Correct High was only 28.32)

RUT Levels

The RUT had another dizzy day as it fell, found support, rallied 27 points then fell back to close 2 points down at 662.35

The RUT closed with a High Wave Doji candle showing extreme indecision.

The RUT found intraday support at 747.58 today and the RUT also has some support from the March lows at 643.28. It came so close today to testing that March low and I would have been in more of a bullish spirit if it had. With the collapse of the RUT in the last half hour of today's trading, I'm more inclined to watch for a second chance of retesting the 643.28 tomorrow. With the SPX and DOW closing at new lows today the selling is still not over.

RUT Daily Chart: High Wave Doji candle formed today

SPX Close Below 1220: Not Good

There is no price support below SPX 1220 until you go back to October 2005. Today the SPX closed at 1214.91

Unless the SPX gets a tremendous bounce tomorrow morning and can trade above 1220 then the prospects for another move down are probable. The intraday move down this morning found support at 1200 and as we mentioned yesterday there is also some support in the 1775 area if it falls below that.

The market seems like it's dying to put in a bottom but if it continues to put in lower closes and this time below 2006 and 2007 support levels it will have to wait.

Bias is still down -- really seems like it's going to need a significant VIX spike to do it, not the weak move to 30 that we had this morning. More pain seems due before a bounce develops.

SPX Weekly Chart: 2006 and 2007 support broken

VIX Hits 30

Okay, now we're getting close. The VIX hit a high of 30.72 today, but drifted lower to close at 28.54 for the day, up a measly .06

The trend is heading higher we'll just have to wait and see what tomorrow brings. I would still not be surprised to see 33 or 35 as this mornings sell off was fun and profitable, but not the 30-40 point move down to SPX 1175 that I expected. There wasn't that much stress selling and the quick and massive reversal was evidence of this.

The fact that the SPX closed down 13 points (the reversal didn't hold) shows us that the selling is not over yet.

VIX Daily Chart: Uptrending and 33 and 35 still look like good targets

VIX: Target 1 = 33, Target 2 = 38

How bad will it get?

The VIX has been creeping up since the low of 16 back in May and continues to climb. Today's close at 28.48

The last 3 VIX highs all signaled short term bottoms and hit highs of 37.50, 37.57 and 35.60. The economic conditions when we hit those areas seems rather tame compared to the domestic and global issues we're dealing with today. In my neighborhood we're a few cents away from $5.00 gas. The Government tried to come in over the weekend with a band aid for Freddie and Fanny which helped the pre-market futures, but the market tanked from the open to close at a new 2 Year Low. The price action and VIX action is reaching critical technical levels where many are expecting a capitulation move that never happened during the first big drop in March. There was a nice bottoming tail on the SPX on March 17th, but there wasn't any real panic intraday compared to the action we saw on January 22 when there was a 48 point intraday range and on January 23 when the SPX had a 69 point intraday range -- that was capitulation!

Although I would never go as far as to predict what will happen, the ingredients for another one of these "large range" days is brewing with the most important factor in my eyes being the lack of any recent support below the 1225 area. If it cracks below that area it will mean that everyone that has been long since Nov 2005 is wrong.

The SPX closed at 1228.30 today and the VIX closed at 28.48. The next level of support I see below 1220 is 1175 which is a quick 50 points where the SPX sits right now. Take a look at the daily candle for August 16, 2007 and you'll see the same scenario was there on August 15th -- support was months old and fell over 40 points intraday on the 16th to retest those old March 07 support levels.

In summary, the SPX may pull out a little miracle here and support at 1220. However, if it doesn't the charts suggest that it may fall very quickly to retest the 2005 support levels near 1175. The SPX charts illustrate how it moves historically when support is absent.

Either way there are some tremendous profit opportunities out there right now, just make sure you're nimble and stay on the right side of the trade. The whips will be quick.

VIX Daily Chart:



SPX Daily: The August 16, 2007 Capitulation

SPX at Cliffs Edge: Lowest Close Since June 2006

The SPX closed at the cliffs edge of 1225 today. Note on the 2 Year Daily Chart that there is no prior price action below the 1220 level until you go back to October of 2005. That means that if the index breaks below the 1220 level there is the possibility and probability of some panic selling.

VIX is creeping up and closed at 28.48 today. 35 is not that far away anymore.
(note: we were at a 16 VIX in April)

On the bright side, the bigger the fall the bigger the bounce.

Take risks, avoid danger - trade smart out there.

SPX 2 Year Daily Chart:

$VIX hits 61.8% / US to Rescue Fred and Fannie

Two out of three are whispering a reversal to the upside. (VIX hitting resistance, US rescuing Fred and Fan). Now we'll just have to see how that affects the dollar and oil.

Monday will be a fun one!

Topping tail on VIX, we'll have to see if this holds or if a 35 VIX is somewhere in our near future. Evidence so far is a bounce in equities, but we'll need to watch where we close tomorrow to see if the bullishness can continue.

At time of this post ES futures are up 1.00% on the rescue news.

$VIX Daily Chart:

DOW Kisses 11,000

The Dow now has permission to bounce after kissing the 11,000 intraday. Not sure what the rest of the day has in store, but I'm more convinced of a bounce now that it's touched the 11,000 mark and the VIX got up to 29. Additionally the SPX about to test the 1225 area which "should" also be a support area.

DOW Daily Chart: (Intraday Snapshot at 11:50am EST)

Book Recommendation

I just finished up a great biography on Steve Jobs entitled "Icon."

I highly recommend this book to any trader or business owner who wants to see how persistence really works. The real Steve Jobs business success story is better then any Hollywood script someone could come up with.

What is particularly interesting to me are the numerous points at which his ventures almost went under, (including Apple Computer) and how his persistence has ultimately made him the king pimp of the Computer, Music and Movie World. Now with the iPhone he's soon to be the most important man in Telecom.

Persistence works and this is a great example of what happens when you have a vision and you don't give up.

iCon, Steve Jobs, The Greatest Second Act in the History of Business
By Jeffery S. Young and William L. Simon



Can you imagine a world without Apple?

This Weeks Big Picture

I posted a lot of sector and market index charts below, but I'll try to sum up what I'm seeing in this section.

The market is trying to put in a bottom and bounce, but there are still the credit issues and surging oil prices that continue to bat it down. It's seems to be supporting and it still may hold, but many are anticipating and expecting a capitulation move down which may be keeping the big money buyers on the sidelines for now. If and when we get the next leg down we should expect a retracement similar to what we've seen in all of the other hard moves down. They may take a while to develop but it will eventually bounce back up. It always does in time. Have patience.

I continue to be bearish on the intermediate term as the charts are confirming that, but I also expect a relief bounce to develop soon that could last a month or two.

I will continue to watch the charts and base my trading decisions on what I see and not on what I think.

The NDX Sector Rundown

Frequently I like to look at the 4 dominant sector components of the NDX which I track using the Internet, Software, Biotech and Semiconductor Sector Indices.

This week I pulled out to some weekly charts, and in the case of the Semiconductors I had to pull out to a monthly chart to find any meaningful support that might come into play in the near future.

The NDX is still has the resent relative strength of all the major indices, but there are some very mixed signals happening in the core sectors that support the NDX so lets take a look and see whats happening there. For the NDX to get some real strength
at least 3 of the 4 sectors should be heading up.

Hear was my scorecard for the sectors on tonights call:

Biotech > Positive, holding long term uptrend and rally would help NDX
Internet > Neutral, sideways, some good Google news needed to send this back up
Software > Negative, chart looks bad and sales look soft going forward
Semiconductors > Negative, chart looks bad and ready to fall off a cliff

Biotechs and Internet will really need to do the work as the Software and Semis are just wild cards at this point. If they ALL do bounce soon in unison then the NDX could get a nice rally.


SemiConductors:

My take is that this will continue to be a longterm downtrending sector. The first clue is that it's near 5 year lows so the price action is telling the story. Second is that the margins in this business are all but gone. In 1986 I bought my first Kaypro computer with 2 floppy drives for $3200 (and that was with my employee discount and didn't include a monitor). Three weeks ago we bought a brand new Dell computer with a 19 flat panel and FREE shipping for $419 -- chips are more of a commodity now then ever the margins continue to erode. When margins erode so do profits, it's a vicious cycle that the manufacturers will need to deal with along with the potential of decreased demand in the current weak economy. This is all just my opinion but and prices will do what they want, but there are few industries like the semiconductors that have seen their margins erode to this extent and it is showing up in the charts.

I had to pull up a monthly chart on the semiconductors because there is no other evidence of support areas on the weeklies. It needs to hold this area or it could be a big fall to who knows where?

SemiConductor Sector Index Monthly Chart:



Software:

Software has been forming a Head and Shoulders pattern on the weekly charts, but aside from that it's confirming the continuation of a downward trend with lower highs and lower lows. It has some potential support at 550, but very little support after that. A weaker economy my spell less business spending that will likely continue to weigh on this sector.

Software Sector Index Weekly Chart:



Biotechs:

If the Biotechs can hold on to the upward trendline then there may be hope! Last week it put in a strong bottoming tail and this week so far has confirmed the continue movement up. This is a good one for the NDX right now. However, to be far to the bears it too has a lower low and lower high so technically it's still in an intermediate downtrend. (Long term trend is still up)

Biotech Sector Weekly Chart:



Internet:

When I think of internet I think of Google and from my experience this chart and Google's are very similar. Like the software sector index, the internet chart is also forming an Head and Shoulders pattern on the weekly. It too continues to trade in a confirmed intermediate downtrend with lower lows and lower highs. As of today the weekly candle is forming a bit of a topping tail as it's testing the 30MA and 100MA on the weekly. It's at a very pivotal point right now very much like the NDX and the Internet Sector my be the tipping point for the NDX one way or the other.

Internet Sector Index Weekly Chart:

RUT Trading Levels

The RUT has been the spastic step-child of late and it's moves have been extremely exaggerated in each direction. This movement has been great to capture some points intraday, but it's left the daily charts in a confusing state of flux and has everyone wondering if the RUT will have the strength to stay above the March lows or if this is just the last batch of bullishness until it follows the SPX and DOW to set new 52 week lows. Only time will tell, but be ready for the fall or bounce because it seems like a 50/50 shot at this point.

RUT Weekly Chart:





RUT Daily Chart:

SPX Trading Levels

The SPX is looking very similar to the DOW and they continue to move in relative unison apart from the price action of the NDX and RUT. SPX and DOW have the relative weakness.

SPX Weekly Chart:



SPX Daily Chart:

The DOW Levels

Looking at the DOW Weekly, it still seems as though it's going to want to retest 11,000. It bounced off of 11,100, but after the sell-a-thon this afternoon after Oil prices spiked back up there we're a lot of people who hit the exit doors very quickly!

That volatile price action leads me to believe we're just one hideous news story away from another capitulation move that would send it down another leg. We'll just have to wait and see.

DOW Weekly Chart:



The DOW daily is showing that it's trying to hold and bounce. Continued good news could avert another leg down, but the news lately has been pretty grim.

DOW Daily Chart:

ER: What A Day

The RUT had the most volatile intraday price movement I think I ever remember seeing. Very difficult to trade a pivot system today, but it was perfect for some cowboy trades. (cowboy trades are akin to riding a wild bull based on guts and not a system)

There was a rising wedge pattern that played out perfectly thanks to an afternoon spike in oil prices that tanked the equity markets. Note the pure fear seen in the sell off that completed the wedge pattern down to it's base of support at 661.50 and the subsequent violent retrace that made it all the back to above the 61.8% by the end of the day.

Note: The Pivot was 670 today on the ER and it never reached R1 or S1 even with all of the up and down action.

ER 5 Minute Chart:

VIX: Fear is Back

Ugly selling in the later part of today's session popped the VIX out of the top of our range again. The VIX uptrend is still intact.

VIX Daily Chart:

RUT: The Fake Out

Not much else to say other than yesterday's rally was a fakeout. Great low risk shorting opportunity presented itself at this morning's highs.

Some REALLY good news needed tomorrow or watch out below.

RUT Daily Chart: (closed below the halfway mark of yesterday's candle > bearish)

DOW Bounce Lacks RUT Exuberance

I was trading the ER (RUT e-mini Futures) intraday today and when I finished up the day and looked at the daily chart I was astounded at how much ground that big white candle covered today. Conversely, looking at the DOW chart it completely lacks the buying enthusiasm that we saw in the RUT today. The RUT was up 3.71%, the DOW was up only 1.36%, the SPX was up 1.71%

Looking at the RUT, it looked like a solid candle for the market to build on but after seeing the DOW and SPX daily candles I have much more of a neutral to downward bias.

Besides a few words from Bernanke, nothing has fundamentally changed with the economic outlook. The VIX DID drop significantly today so the fear has definitely eased. Lets just see if that can last the rest of the week for starters.

Note too that the DOW is still way below it's March lows while the RUT has yet to fall to it's March lows.

DOW Daily Chart:

VIX: Back in the Range

The VIX fell hard today which put it back in our zone. Is this the end to the short term sell-o-thon? We'll see.

VIX Daily Chart: