Chopping Around Near Support

By -

SPX made a low at 2045 yesterday morning and has been chopping around since. There is much talk that the low is in but I doubt it. My 5 DMA stat is expecting a break below the 2039.69 low and we haven’t seen that yet, and I still have possible bull flag support in the 2030-5 area. If that isn’t the reversal area I’d be looking down rather than up for the next targets. SPX daily chart:

150327 SPX Daily Broken Rising Wedge Options

(more…)

VIX’s Bollinger Band and the S&P

By -

Below is a chart that shows a nice correlation between the price action of VIX and SPY and their 20, 2 Bollinger Band. What the chart shows is that typically when the VIX hits the upper level of its Bollinger band along with SPY hitting the bottom of its BB, it marks a low in the market and a bouncing point. It is same on the opposite side of the Bollinger Band, so when VIX touches the bottom of its BB and SPY touches the top, this marks a top in the market.

VIX touched the touch of its BB yesterday but SPY did not. This pattern usually jump starts when both hit the BB and the VIX will typically hover around its BB for 2 – 4 candles. For SPY to hit its BB it would need to get to 203.38, which is right around the March lows. This correlation is pretty strong and it shows there is some potential for further downside but it is limited. Plus our signal is flashing oversold I know not music to Slopers ears so be careful!

(more…)

So……

By -

The past twelve hours have been just bizarre. The newest little war in the mideast broke out yesterday after the close, but the ES and NQ didn’t seem to care for many hours. Crude oil, on the other hand, went absolutely ballistic, as did (later) precious metals. And yet since peaking in the wee hours of the morning, gold has been just pooing all over the place, and the the once-glorious drops in e-mini (like down over 20 points on the ES) have turned into green (just like some Slopers adroitly pointed out it would early this morning).

(more…)

Revenge of the Killer 5DMA Stat

By -

Well I said it would be a big break if my rising channel broke and well, here we are. SPX broke back below the daily middle band yesterday and closed at the test of main rising wedge support. That has broken down at the open and we are back to the stats I gave at the break back below the 5 DMA a few days ago, when I said that every similar break since the start of 2007 had resulted in a lower low before a higher high. I’m expecting that lower low under 2039.69 this week and most likely today. I’d add that the daily lower band is at 2040 so that really is the next obvious target. SPX daily chart:

150326 SPX Daily Rising Wedge BBs MAs

(more…)