Monday, November 9, 2009

Flying high on vapors...

Wow...look at it hug the trend channel today. In fact if you look on the 60m chart there are no red bars today. We are getting close to 110.33 which is the top of what I think P2 is. Right now its fairly easy...if we exceed the top then that was not the top of P2...and probably where we are currently is the top. If we don't exceed the top...that was probably P2 :)
When we break that trendline I have on the stochs, I expect we will retreat sharply.
Today was a MASSIVE up day and guess what...the BPSPX barely budged. BPSPX:CPC has not crossed the 20ma up so I do not have my cover short/buy long signal yet. But it sure looks like its heading in that direction.
CPCI:CPCE ma's actually crossed intraday, which is a signal to short, but by EOD they were equal.

VIX has been making higher highs and lower lows since September. Back from my EE systems days, this really looks like an unstable system thats about to explode:) Its sitting around support right now.

In conclusion, I think its minute [ii] of minor 1 of intermediate 1 of Primary 3 still. A new high will change that view. But what now? We are inches away from a new high, BPSPX:CPC is heading for a cross of its 30ma. Juice the futures a little tonight and we can gap above the previous high. In fact, based on recent trends closing at the high of the day should carry the momentum through till tomorrow.
VIX is at support, so I expect an immediate turn around, or perhaps consolidation in both the VIX and SPY for a day and then a collapse in SPY and a spike in the VIX. We have been rising on declining volume for 6 days now. To me this is like a game of hot potato right now. Who is going to be the last one stuck...Again, if we break the 110.33 level...then my view changes.

Ok...bonus chart...I was looking through my Stock Charts book...and forgot about:
The bonds formed a bearish doji star today. Which is along the lines of what I thought would happen tomorrow in SPY...a consolidation day followed by a reversal down on Wednesday.

Edit 8:56pm: And one more chart.
If this rally is fueled on the fall of the dollar. How much further does the dollar look to fall? Today it ended on the green support line, any break of that is a bit open until the red support line. It has formed a bullish falling wedge. I would expect to see it spike out of the wedge in the very near future. Of course a rising dollar would be detrimental to equities...
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