Tuesday, March 9, 2010

Looks like my purchase will be for the short term...

The extremely sharp rise in the past month has been on ever decreasing volume. My purchase today is likely to be much shorter term than I anticipated. The SPY Daily is exhibiting a "shooting" star like formation. I am looking for a pullback tomorrow and into Thursday.
VIX painted two black candles in a row. So the VIX is technically up today as well as the market. This is interesting and you can see some of it in the CPCI:CPCE chart later on. VIX has been far from the 20ma for quite some time now. It needs to revert back to its mean.
BPSPX:CPC warned us early that this rally might happen. I was hoping for a good pull back to get out but that did not happen.
There has been massive call buying in equities. The market has been going up for 1 month now. We see that the CPCE has dropped sharply indicating massive call buying relative to puts. Everyone is buying calls with the market being up for a month? I think this is the time for a sharp drop to make those calls worthless.

Admittedly, we will have to wait for the BPSPX:CPC 20ma to cross the 50ma going up and then coming back down before we can make a big commitment.
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