Author Archives: Closing Basis - go with the flow

All Bid Up and Nowhere to Go (almost)

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Before I get into the Trade Idea, I’m going to review the context of the S&P500 from a structural standpoint and a typical deviation standpoint. First of all, structurally, the Weekly and Daily charts show higher highs and higher lows, the very definition of an uptrend. In November of 2016, the SPY completed a $20 wide trading channel of which currently price is a stone’s throw from its high resistance. The channel would suggest that buying potential is limited.

Now, anyone who hangs around the comments has seen that I use 5% simple moving average envelopes around a 100MA as a measure of movement potential (oversold, neutral, overbought). Where are we now? Yep, hit it on Friday. Again.  (Click on any chart to see a larger version).

170211 - 2year 100MA Deviation

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Bollinger Breadth Follow-Up

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Hello Slopers!

You may recall my previous post after the initiation stage of the Trump Rally here which was about a week after the election.  I shared the likelihood for forward trade was in a flat to up trend, but that there was a lesser chance of a large drawdown if price did reverse.  I have a little more context to it now so I thought I might show you what I’ve found.

161201 - SPY Drawdown Potential

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US Dollar Ripple Effect

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There’s been a number of significant level breaks/hits over the past week and it seems timely for a longer-term chart review. Here come the weekly charts.

A lot of the charts coming up relate in some way to the US dollar so let’s take a look at that one first.

The USD chart has broken out strongly from a 2 year range. There’s no arguing with this breakout, the USD is going higher. Since a lot of commodity charts react to moves in the greenback, let’s take a look at some of the more popular ones.

161125 - US dollar weekly

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Bollinger Breadth

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Well, I know I’m not the only one who is glad the election is over. Truth be told, as glad as I am to see price moving around again after this summer’s lethargy, I have my fingers crossed that volatility dials it back a little from here because it’s a bit too much for me. BUT, after just one week, conditions have changed considerably so a quick review is in order.

Coming into Election Day, there was a significant amount of hedging going into the uncertainty of Nov 8th was evident by the high SKEW readings and Equity Put/Call ratios. Since then, the SKEW has returned to mid-levels and Equity Put/Call is not far behind.

161111 - SKEW reset (more…)