I don't think there's a person on the planet that doesn't want a sensible, calm market to return. This is getting more insane every day. The VIX almost went into the triple digits today. You can see by the candlestick, and the huge shadow lines, how completely uncertain and volatile everything is.
As I've been mentioning, there are signs that things may be getting ready to turn around, at least for a little while. The battered Eurodollar is basing a bit.
And the even more-battered gold is at technically significant levels to suggest a bounce.
Crude oil, only a few months thought to be headed toward $200, is at its 25% median line, thus providing a possible bounce to $80 or even $90.
As for the equity markets, these are at extremes too. Witness the $MSH, which is getting near its own retracement level.
And the NASDAQ 100 has its entire Fibonacci fan structure from 2002 as a "backstop', given the lows reached today.
Need another example? Here's the $MID, pushing right up against its retracement and supported by a large amount of trading activity from 2000-2002.
As you can probably divine, I am position for (a) high energy (b) higher equities. I am not ruling out the possibility of one more severe leg down, and I sold some NQ after the close today at a little over 1250 to hedge myself for this possibility. But, by and large, I think we are close to a bottom for the year. I find the bullish prospects for commodities especially interesting. Although I don't intend to trade wheat, I find this major commodity to be an interesting proxy:
I only "discovered" the UDN and UUP equities this week, thanks to Slopers, and I own a large quantity of puts on UUP (in other words, I am expecting the dollar to fall).
The whole subject of commodities is a bit of a challenge, because on one hand it's easy to consider them severely "oversold" (whatever that means……….) but on the other, looking at this $CRX graph, there is no technical basis for support. So all we're due for at some point is a technical point. But in terms of price action, there is virtually no "plateau" available to hold this up.
For those of you who have been suffereing the data problems in MarketMatrix or ProphetCharts this week, understand that I feel your pain. I use this stuff too, and it's maddening for me to be seeing these problems. I don't usually use this blog as a place for technical updates, but I know many of you use ProphetCharts and – – for intraday graphs and live quotes – – have seen many problems the past few days. We are deploying some changes this afternoon which may give us a better Friday. We won't know for sure until the trading day begins, but we have been working almost around-the-clock on these issues. Obviously we're not going to quite until we know everything is working smoothly.
