Head and Shoulders pattern predicted 47.50 target which was hit today.
Panic selling prevailed. A bounce is right around the corner as the VIX
historically does not stay at extremes.
VIX Daily Chart:
Monday, September 29, 2008
VIX: Head and Shoulders Update
Bingo!
Head and Shoulders pattern predicted 47.50 target which was hit today.
Panic selling prevailed. A bounce is right around the corner as the VIX
historically does not stay at extremes.
VIX Daily Chart:
Head and Shoulders pattern predicted 47.50 target which was hit today.
Panic selling prevailed. A bounce is right around the corner as the VIX
historically does not stay at extremes.
VIX Daily Chart:
Thursday, September 25, 2008
VIX: Reverse Head and Shoulders
The VIX has been hanging out in the 30 territory for a few days now, and if the reverse head and shoulders pattern works out (as they almost always do), be prepared for another leg down in the market and a 47.50 VIX.
Headlines on Marketwatch tonight prior to this post,
"WaMu Bank Failure Biggest in US History."
There is certainly enough fear building up to hit a 50 VIX, lets just hope
the Fed can step in to avert it. Although as I trader I can take advantage of it, I am more in favor of a stable economy and stable markets.
Be prepared and trade safe.
VIX Daily Chart: Reverse Head and Shoulders
Headlines on Marketwatch tonight prior to this post,
"WaMu Bank Failure Biggest in US History."
There is certainly enough fear building up to hit a 50 VIX, lets just hope
the Fed can step in to avert it. Although as I trader I can take advantage of it, I am more in favor of a stable economy and stable markets.
Be prepared and trade safe.
VIX Daily Chart: Reverse Head and Shoulders
Thursday, September 18, 2008
RUT: Huh?
The VIX chart told the whole story today and "on que" mounted the biggest intraday rally i've yet to see in my short 2 year trading career. As I'm typing this post the ER (RUT) futures are at 731. At 10:00 this morning (Pacific) they hit a low of 673.20. That's a 61.8 point move in just over 8 hours. Keep in mind that 100 points is a significant MONTHLY range to trade in.
On Monday I bought back all of my September positions EXCEPT some Sept 770/780 Call spreads because I thought it would literally take Jesus coming back down to earth for the RUT to trade back at 770 by Friday. I like to think that I am extremely disciplined on taking of my positions before expiry week, but if you sell spreads like I do there are sometimes one or two positions on the top side that are so far away that it does seem "impossible" for them to get hit on expiry. I'm writing this post as another gentle reminder (to you and myself) that it is always best to just take everything off by expiry. I learned my lesson months ago when a similar situation happened on Thursday at 12:00 when one of my top positions was 40 points away from the price action. I figured with an hour to go I was safe. The market rallied 20 points the last hour of the session and then gapped up 20 points piercing my strike erasing my profits and handing me a $500 loss instead.
With the high volatility there is EXTREMELY EMOTIONAL buying and selling going on, much that flies in the face of any technical set ups your looking at. Take advantage of this movement, but don't be fooled by these one day wonder moves and they are likely just that.
VIX Daily Chart:
On Monday I bought back all of my September positions EXCEPT some Sept 770/780 Call spreads because I thought it would literally take Jesus coming back down to earth for the RUT to trade back at 770 by Friday. I like to think that I am extremely disciplined on taking of my positions before expiry week, but if you sell spreads like I do there are sometimes one or two positions on the top side that are so far away that it does seem "impossible" for them to get hit on expiry. I'm writing this post as another gentle reminder (to you and myself) that it is always best to just take everything off by expiry. I learned my lesson months ago when a similar situation happened on Thursday at 12:00 when one of my top positions was 40 points away from the price action. I figured with an hour to go I was safe. The market rallied 20 points the last hour of the session and then gapped up 20 points piercing my strike erasing my profits and handing me a $500 loss instead.
With the high volatility there is EXTREMELY EMOTIONAL buying and selling going on, much that flies in the face of any technical set ups your looking at. Take advantage of this movement, but don't be fooled by these one day wonder moves and they are likely just that.
VIX Daily Chart:
Wednesday, September 17, 2008
VIX: 41 or 31 on Thursday... or Both?
The day ended with a fake-out rally in the early afternoon that fizzled to new lows in the last hour of the session. It was interesting the see the VIX chart end at the high of the day.
Tomorrow will be a fun one. Crash? Capitulation? Rally? All of the above?
Even after 9/11 the banks, broker/dealers and insurance companies we're still intact.
We may be entering a new era here and the markets could be headed back to an environment as we saw near the dot.com bust where VIX ranges were in the 25 to 35 range. Only time will tell.
VIX Daily Chart:
Tomorrow will be a fun one. Crash? Capitulation? Rally? All of the above?
Even after 9/11 the banks, broker/dealers and insurance companies we're still intact.
We may be entering a new era here and the markets could be headed back to an environment as we saw near the dot.com bust where VIX ranges were in the 25 to 35 range. Only time will tell.
VIX Daily Chart:
Monday, September 15, 2008
SPX Monthly: The Grim Reminder
We've been talking about a double top on the SPX Monthly Chart for over a year now, and at the time it was just an observation that we were rising but there was some longer term resistance in the 1550 area.
Fast forward a year and it's playing out the way many of these price patterns magically do. Now the question for us all is, "how far will it fall."
Notice on the chart that so far the September monthly bar has broken the upward trendline that has been intact since the bottom in 1991. Keep your eye on that monthly candle at months end and draw you own conclusions. (remember as we saw in today's SPX daily chart that trend breaks can be significant)
SPX Monthly Chart: Double Top Pattern (bearish) Playing Out
Fast forward a year and it's playing out the way many of these price patterns magically do. Now the question for us all is, "how far will it fall."
Notice on the chart that so far the September monthly bar has broken the upward trendline that has been intact since the bottom in 1991. Keep your eye on that monthly candle at months end and draw you own conclusions. (remember as we saw in today's SPX daily chart that trend breaks can be significant)
SPX Monthly Chart: Double Top Pattern (bearish) Playing Out
SPX: Trend Basics
I can't figure out why ANY TRADER was surprised by today's action.
The intermediate trend is down.
The 200MA is pointed down.
There has been a continuous series of lower highs and lower lows.
Recent upward trend was broken.
This is why they say to trade the trend.
SPX Daily Chart:
The intermediate trend is down.
The 200MA is pointed down.
There has been a continuous series of lower highs and lower lows.
Recent upward trend was broken.
This is why they say to trade the trend.
SPX Daily Chart:
Friday, September 12, 2008
RUT: Another Positive Day
The RUT finished up in positive territory today at 720.26 and so far seems to be hinting at the possibility of a short term rally next week to retest the recent highs in the 740 area (if it has enough mojo).
The evidence of this potential strong bounce off of 700 on Thursday and todays higher close above yesterday. While there is lots of nervousness about Lehman and AIG, chances are that someone will pull a rabbit out of the hat this weekend to sooth the markets fears. Once soothed, the bulltards are likely to buy with reckless abandon and we get to experience another emotional rally. That's were my head is at this Friday, but I am going into the weekend with negative Delta since it's a lot easier to control the upside then the downside. If the rabbit doesn't appear it could be an emotional sell off to the other side. (All of that above is just worthless opinion).
The charts are showing a neutral to slightly upward bias for next week, but there is some overhead resistance at 730 and 740 that it will have to break above and hold before the short term (6-8 week) downward bias is erased.
Beware, as there is still a long way for the RUT to fall on nasty news.
RUT Daily Chart:
The evidence of this potential strong bounce off of 700 on Thursday and todays higher close above yesterday. While there is lots of nervousness about Lehman and AIG, chances are that someone will pull a rabbit out of the hat this weekend to sooth the markets fears. Once soothed, the bulltards are likely to buy with reckless abandon and we get to experience another emotional rally. That's were my head is at this Friday, but I am going into the weekend with negative Delta since it's a lot easier to control the upside then the downside. If the rabbit doesn't appear it could be an emotional sell off to the other side. (All of that above is just worthless opinion).
The charts are showing a neutral to slightly upward bias for next week, but there is some overhead resistance at 730 and 740 that it will have to break above and hold before the short term (6-8 week) downward bias is erased.
Beware, as there is still a long way for the RUT to fall on nasty news.
RUT Daily Chart:
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