All four days this week have been about recovering from last week’s action; I suspect/hope the unraveling can resume on schedule next week. Aligned with that, Japan is setting itself up for a bigger fall than we’ve seen for a while. If DXJ can fight its way back to about $47, I think it will provide the proverbial lay-up shot of a shorting opportunity.
My largest short heading into the day was EEM. In spite of yet another ridiculous mini-rally this morning, things are once again falling to pieces. As the daily chart shows, the repetition of buying-based-on-unicorn-farts followed by a stall (tinted thrice) and then a plunge-based-on-reality is getting a little predictable.
I’ve expressed enough confusion about the VIX to draw some attention from good-hearted folks who, unlike me, know a lot about the subject. One fellow in particular, whom has chosen to remain anonymous to readers, was good enough to compose the explanation beneath, complete with charts from his Bloomberg terminal; thank you! (more…)
I have traded the VXX only once or twice in my entire life, and I know nothing of its nuances. I was surprised, however, to see what I saw today: while the $VIX was up double-digits, the VXX was up something pathetic like 1.8%. I (naively) assumed that VXX and $VIX moved in lockstep. I decided to lay down the two items on top of one another in ProphetCharts, and as you can see, the VXX (in blue) excels in pretty much going down all the time, almost irrespective of the $VIX’s wild moves: (more…)
The resurgence in housing and real estate has been puzzling beyond belief, but it looks like that mean old buzzard Reality is starting to circle – - the failed bullish breakout (two of them, in fact) seems to be forcing a trend change. Homebuilders is one of my larger short positions.
To an extent Friday went much as I laid it out in the morning. SPX overshot the perfect retests of the daily middle band and the 50 hour MA by a couple of points, but on the NDX and RUT patterns I was looking at we saw perfect tests and reversals at pattern resistance. This gives the bears the edge as long as resistance on those patterns holds, and gives me two excellent marker patterns to watch as we wait to see whether the double-top on SPX is going to break support at 1839/40.
While these last I’ll be posting both of the NDX and RUT patterns every day, and on RUT the next obvious target is the double-top target in the 1130 area, the 61.8% fib retrace just above at 1132, and falling channel support which is currently in the same area. RUT 60min chart: (more…)
For the 4th time in recent memory, TLT is approaching its resistance level at 109.18. In this insanely-leveraged world of ours, our economic future relies largely on interest rates, so it’s going to be terribly interesting to see if TLT breaks above this level (suggesting lower rates) or swoons.