Wednesday, September 29, 2010

09/29/10 Update

Looks like we really don't want to pierce that red resistance area. So what point of view do you prescribe to? Coiling up for a move up? or running out of steam from the last move up? My view is the latter as the move has had an upward bias since mid September. Typically a move up is preceded by trading in a channel with a slight downward bias.
VIX closed above the 20MA...
That should be it for the BPSPX:CPC. We will see soon enough.

Tuesday, September 28, 2010

09/28/10 Update

We squeaked out a new high but stochs did not. Again we bounced off the red resistance area.
VIX closed at the light blue resistance line which is also where the 20ma ended at, BB's are starting to pinch.
BPSPX:CPC move down a good amount today. One more day at most before a sharp move down.

Monday, September 27, 2010

09/27/10 update

SPY touched the red resistance line and formed a dark cloud cover bearish reversal pattern. This is among the more reliable of candlestick patterns.
VIX closed near the 20ma. MACD histo looks like it may be turning back up.
BPSPX:CPC 20ma has crossed the 50ma moving up. Normally this is where you would go long, except that everything is now peaking. The 20ma spent a minimal amount of time below the 50 and I expect it will spend a minimal amount of time above the 50 before turning back down.

Sunday, September 26, 2010


Wow, the move up on friday was not a surprise, but the magnitude of it was. Thursday's reading was tricky with all the candle formations pointing up. Slow stochs diverging a bit. Again SPY touched the red resistance line and finished the day near it.
The VIX pull back that far was quite surprising. I would have thought that a pullback to the 20MA was more likely and more of what I was expecting. The gap below the 20MA and then the move lower surprised me.
Based on the time series since May, the BPSPX:CPC looks like it only have 0-2 days left before it turns sharply down.

Thursday, September 23, 2010

09/23/10 Update

Price action touched the red resistance line bounced back down and closed below the blue neckline drawn for the inverted HS. The only issue is that the candled formed has gravestone doji/long legged doji characteristics that are bullish reversals.
The VIX cleared the 20MA and closed above. I would not expect it to move below again for awhile. BUT it did form a dragonfly doji which is a bearish reversal for the VIX (bullish) for the market.
I added the thin blue line to show that we are a bit high on the VIX:VXV than we have been on other "failures" to launch.
More divergence from the BPSPX:CPC. It moved up slightly today. The BPSPX was actually unchanged but there was an increase in Call buying compared to yesterday.

Tuesday, September 21, 2010

09/21/10 Update

Spy touched the upper resistance line and bounced off.
VIX is still sitting in a tight range.
A bit of divergence today. BPSPX is up, but the SPX was down.

Monday, September 20, 2010

09/20/10 Update

SPY broke cleanly out of its previous trading range. The red dotted line is a key area as it represents the opening of the huge black candle in early May as well as filling the open gap down that was left over in early May.
Now the VIX has held the red support line. At this point I would think a trip to the lower BB is in order before finishing the market rally.
A lot of call purchases in equities AND indexes relative to puts. This is strongly contrarian. For the short term there maybe a pull back before new highs.
BPSPX:CPC was sharply positive again. Shorts are going to be squeezed a bit more. I dumped a portion of my quarterlies for a loss and rolled part of that into October.

Wednesday, September 15, 2010

09/15/10 Update

Stochs look like we need a pullback. The count looks like we are still in Minor 2 and possibly near the end of it.
VIX and SPY both positive today. Possibly a green day up tomorrow.
BPSPX:CPC averages moving back together again...

Monday, September 13, 2010

09/13/10 Update

Price Chart is very bullish. We have an inverted H&S pattern that has formed as well as a rising triangle (Connect the H and R with a trendline). The H&S target is actually at about 125. The 01/10 highs at around 114 should offer strong resistance.
The VIX closed sharply lower and correct any negative divergences from Friday.
BPSPX:CPC is still saying sell...If the 20MA crosses above 50MA moving up, its time to get out of short positions.

Sunday, September 12, 2010

09/12/10 Update

So we gapped up over the trend line, this fine Sunday evening. Is this all from the new rules to avert a banking crisis? Is it to late already? Futures are sure happy tonight.
Just finished reading the news. While the measure is not a bad one, it will avert the NEXT banking crisis, but not the one we are currently in. Many governments are now in the same trouble that Lehman and Bear Stearns were in. Liquidity on that scale is difficult to come by during tough times.
But the VIX is showing divergence on the dailies. This last thrust to new highs did not take the VIX to new lows. The VIX should turn up tomorrow...that would be my guess based on Friday's close, but as we see the Futures are way up tonight. Still I suspect a volatile week and the trend to turn down for the market as a whole.
BPSPX:CPC was down friday separating the 20 ma and 50 ma more. The BPSPX itself is at an upper trendline.

Thursday, September 9, 2010

09/09/10 update

Slow Stochastics still overbought and look to be curling over. Volume has been tapering off.
Sharp bearish rising wedge looks to break soon on SPY.
The VIX closed at resistance/support while spending most of the day above it. With it not closing above support, this leaves tomorrow somewhat dubious on direction. The rising wedge could experience a false break out to the top, or we could have a failed e leg.
Intermediate term we are still down.

Wednesday, September 8, 2010

09/08/10 Update

Daily Stochs are still oversold and todays candle was unable to make a new high. has had a fairly high success rate in the is also flashing sell.
I did think today was a possible move up because of the excessive put buying yesterday (I mentioned it in the comments). These indicators are for intermediate term trading and not day trading. The VIX held support (the dotted blue line).
Nothing has changed in the BPSPX:CPC...still screaming sell.

Tuesday, September 7, 2010

09/07/10 Update

SPY formed a bearish evenstar formation which is considered high reliability for a bearish turning point.
VIX formed a corresponding bullish eveningstar formation
VIX:VXV setting up for a launch yet again...
Finally...DING DING DING...BPSPX:CPC 20ma has crossed below the 50MA...the down turn is confirmed!

Monday, September 6, 2010

09/06/10 Update

This should be about it on the count. It is possible that we are still tracing out Minor 2 as postulated by Daneric. I do not think that is the case especially based on the BPSPX:CPC.
We pierced the lower BB. VIX has not done that in quite a while. So unless we are actually in a new bull market, this situation will not last long.
The BPSPX:CPC 20ma is soon to cross the 50ma. A good size drop is around the corner. I accumulated Sept quarterlies on Friday along with some atm Sept puts.

Friday, September 3, 2010


What I noticed this morning but failed to notice last night is that the VIX is very close to a support/resistance line that I have drawn in tourquoise ages ago. Often times it bounces off that line instead of making a complete trip to the lower BB. A bounce near where we are at is soon due.

Thursday, September 2, 2010

09/02/10 Update

109.79 is the 62% retrace for minute (ii), it looks to be about over.
I am really looking at the VIX to bounce off the lower to mark the end of Minute (ii).
BPSPX:CPC says short! I bought a hunk of SPY sept put quarterlies today. Note that even though today was up a good amount...the BPSPX:CPC was down.