Category Archives: Indicators

A Lesson in Managing Grinding Moves

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The last time I posted (Nov 29th), I shared the VXV:VIX ratio and suggested that the S&P500 was likely to continue it’s grinding uptrend unless something changed.  I also shared HYG as a potential short which I unfortunately missed, but turned out much better than I expected.

As it turns out, the grinding call was the right course of action as the daily 20MA held the following Monday and ground its way back up to the highs again.  This past week, price appeared to be doing the same until Tuesday, December 9th which broke the 20MA and delivered a lower low on the hourly charts.  Despite the very bullish looking candle, the depth of the decline put me on guard for further selling. (more…)

SPX Cliff-Hanger

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I last wrote about the SPX in my post of December 3rd.

Here’s a Daily chart of the most recent market action on the SPX as of Friday’s close. Price ended around the near-term support level of 2000. You will note that this level sits at a confluence of price and channel support, which has been broken on the last major swing down, during which, the Momentum indicator made a lower low. I’d say that if price re-tests the 1800 level and fails to hold, we could be looking at a possible major decline ensuing, especially if the Momentum indicator makes a lower swing low. Whether we see such a scenario happening before the end of the year remains to be seen…perhaps not until January. (more…)

E-mini S&P500 Market Analysis – December 11, 2014

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TO GO LONG

CCOC – Consecutive Closes Odds Calculator (TIME EXTENSION ANALYSIS)

Yesterday the market closed down again and made a lower low, but futures started to rise overnight, so it’s possible to have a rebound today. As you can see in the TIME EXTENSION ANALYSIS below, the DAILY time period shows that after 3 days down in a row the market closes the next day up in 87.67% of the times. This means in the largest majority of the cases the market does not go down more than 3 days in a row. Does that mean it cannot go down another day? Obviously not, it can go down 4, 5 or more days in a row, but these events (on average) are quite rare. Statistical research can show what is most possible but the exact prediction of the future will always escape us. We use our research to make bets on what it is most likely to happen (although it may not always happen). (more…)