Late Night Wednesday Quickie Charts

I think today’s weakness may be a precursor to some follow through to the down side. I still think there is some more upside to this rally, as everyone seems impervious to reality, but I would not be surprised to see 2-3 down days before the next push up. Or this could be just like 3/19, a single down move into the rally. I know there has got to come a point in this rally where this mkt. takes a breather, a significant breather. Finding that spot is always a challenge. Chart time:

The VIX has shown an increase in up time this last week. Today it managed to stay green all day. Notice it found resistance at the 20 ma, but it still looks poised for some more up move here.

The SPX had a bearish harami style inside day. This leans me to the downside for tomorrow. In fact, I am currently short and I closed a long position today as well. Obviously if we take out yesterday’s highs, then hold on for the rally to continue, but it really looks primed for a breather here.

So this is the UUP chart I posted on 3/15. I compared the patterns in the down trend to the patterns setup in the up trend. For this to occur we would need to see a breakout from this consolidation.

Well today may have been that breakout. This is a pretty significant pop to the upside and now sets up some support very close by. If it holds to a similar distance move, it should start consolidating again near the top of the green square.

In closing:  I am short right now and my plan is to stay primarily short until Friday. But the way this mkt. has been, I will stay on my toes and be ready to change direction at the drop of a hat. Trade well and prosper. AKOT

What goes up must go down, the question is when.

Normally I would expect a pretty flat morning going into a fed meeting announcement. However, tomorrow there is some potential pre-market moving news in the form of housing numbers. So I imagine we will see some type of news of the numbers, probably an over reaction, a settle down, and then go immediately flat until 14:15 when the FOMC rate decision is announced. Usually I have a pretty good idea how I want to trade these things, but I have to be honest here, I don’t know how this will move the mkt. tomorrow. I don’t expect a change in the rate, but as always votes and language are the key. I still think this mkt. is way over bought and screaming for a good pullback, but if you are screaming in the woods and no one hears it are you really screaming? Chart time:

The VIX, despite having two black candles in a row, has actually moved up here. What I am cautious about are those ominous top wicks. Three days in a row it has rallied only to sell off over half of that up move. I really think this thing is due for a bounce, but I am leaning towards a drop here, despite the indicators.

This is the INDU on a 60 min. chart. Notice how it has been hanging out near the top of the bollinger bands, but if it gets close to the bottom it bounces quickly. Further, if you were to go long on the cross of the 20/50 lines, other than one small move under you would be smiling right now. I did not do that. Also notice the divergence in the RSI and MACD. I usually give more weight to the RSI so it is still looking strong here.

The SPX is either topping here or loading up for a run to take this 1150 out. Note the 20 ma has crossed over the 50 ma. Normally I would expect a bit of a drop here before taking out this resistance.

The most curious of the indices is the COMPQ. Unlike the others it was down decent today and managed to close down. It broke this short-term up trend line, but not convincingly as you can see by this long-tailed candle. I have felt that this was going to be the leader on a reversal, however I am not sure this is the reversal. This could be more like a reload to move higher. This is looking more like the move off the top bb that I like to see before moving higher. The best way to tell is to see if we close above 2344 for the next day, maybe two. If so, then I think we continue heading up.

The UUP bounced as I thought, although it didn’t really affect this mkt. too much. The v was suspect, the gap was filled and then some, then it sold off. This chart is much more intriguing to me when I pull back a bit.

If you can decipher this, let me know what I am trying to say would you? Basically, if you look at the recent drop you can see it had that nice rally followed by a big sell off, then consolidation by another sell off, then another consolidation and sell off. Now that it is moving up, it  had a nice sell off followed by a big move up, then consolidation followed by…….. It will be interesting to see if this plays out in the inverse on the way uup.

Looks like a bit of a bull flag on gap top support here. The indicators are starting to curl down, but notice that the RSI has no problem staying over bought for a month at a time. The fly here is that it may be making a series of lower highs.

TSO on the other hand, lately has not stayed over bought for long periods of time. In fact it gets a nose bleed awfully quickly and tends to drop hard. It is sitting on the 200 ma, so I would be looking for a gap down or big down day to break that support.

In closing: To me the indice charts are still mixed. I still think the COMPQ and the RUT will lead this mkt. lower, but I am just not convinced now is the time. However, the UUP looks like it could rally anytime here so once again I am conflicted. There may be a good morning trade to be made tomorrow, but I will be standing by after that to watch the mkts. reaction to the FOMC. Perhaps that will signify a short-term top, or something to work with at least. Trade well and prosper. AKOT

Is it rude to disrespect crude?

Once again, pretty much as expected. However the +50 point up move on the $INDU was a little surprising. It was accredited to the CSCO “game changing” news. That seemed to me to be an obvious sell the news type of news, but the selling didn’t happen until the last hour of the day. I looked at the VIX throughout the day, and it started green and finished green. Unfortunately,I don’t know if tomorrow will be any better. I know there is econ news, but it is wholesale and crude inventories. Two – three years ago that was great mkt. moving news, nowadays, not so much. Enough babbling about nothing, let’s look at charts:

This is the VIX on a 60 min. chart. Check out today’s last full hour before the close. That is the biggest increase we have seen in two months. You can also see that it is slowly trending up. I just find it interesting that perhaps we may be seeing a pattern forming, so watch for more selling late in the day, on a strong VIX.

The $INDU made another small body big wick day, not a perfect hammer, but close. It is sitting on support but still stuck beneath the “weak” resistance up trend. If it doesn’t move up this week, then I will be looking for a pretty significant drop next week.

The SPX has a couple of reversal candles in a row now. However, the last time it did this was March 2, and you can see it then formed that bullish wedge that it broke out of.

Again, the $COMPQ still looks strong. The 2327 support has held strong, but it did have a pretty big stinking wick today. Normally when I see those in fast up moves, I get just a little cautious. It is not a reversal candle, but it is often a precursor of a reversal candle. However, I usually look for a pattern of them occurring.

The $RUT too looks strong. It is clearly over bought, but it can clearly stay that way for some time. In fact, today it formed a bullish engulfing on support, which would be a much more powerful candle at the end of a down move.

This is the UUP on a 60 min. chart. I am not sure if this wedge is bullish or bearish. In fact, I don’t have the indicators on here, but they would be no help anyway. This thing is hopelessly sideways and crying for a breakout. It is sitting on the 50 ma and 20 ma which, surprise, are on top of each other. So that should offer support and perhaps give the upside breakout the edge. All I can say is that it really looks like it wants to breakout.

To me, this is a classic way to use indicators. Look at this flag and look at the indicators, now you tell me where you think this might go. The first one to email me with the right answer gets free access to my site for a year!

Now I admit, I would like to see a lot more volume here, but at least there is an increase. This is an earnings move up and a breakout of a rounded bottom. If you like “cheap” stocks you may be able to get .25 out of this, maybe more. If you trade it, I would use $2.15 as my stop. I likely won’t trade it, but I wanted to share it. Note the tons of top wicks on the left side of the rounded bottom formation. That is what I call a pattern of wicks. Note also how quickly the disappeared on the up turn.

In closing: We are seeing a slight increase in volatility, and I think it may continue tomorrow. But ultimately, like today, I wouldn’t expect huge fireworks. Thursday and Friday, well that should be a different story. I will be looking for more of a directional day tomorrow, something like an up open, then early day sell off. Trade well and prosper. AKOT

Cracks in the rally? Or I may be wack!

Well at least there was more volatility, sure it wasn’t down like I thought, but at least it moved. I really thought we were going to have  a  very weak day. Why you ask? Well if you noticed, pre-open there was some pretty decent economic news that came out, and cause a small move up on the futures, but not as big a move as I anticipated. When that happens, I tend to lead to the short side. I also expected the housing numbers would be wte, as they were, and I thought this would be the catalyst to send the mkt. to over 50 points down. The mkt. did drop, but instead of having the late day drop, as I noted, it had a late day rally, a pretty decent one at that.

Tomorrow we do it all again. So far all the employment numbers this week have been bte, and most of the econ. news tomorrow is employment related, and out before the open. This should give us an idea which we should be trading for intra-day. I have a sneaky suspicion we will end the day on another up note, but there will be some key levels I will be watching as you will see on the charts:

One of the reasons that I have really been looking for a volatility spike, and in a bearish direction, is the VIX. You can see how reluctant it is to enter the gray square of death. But, the longer it sets here on top, the more likely it is to drop. The last move up was after three days at one level, so I think tomorrow is the day that will decide the short-term direction.

The DOW, lead by DIS’s near 3% up move, closed above that down trend line for the second time since January. I was really pretty confident that this was much more bearish here, so I was a little surprised to see that late day rally that took this down trend out. I know that it is not the strongest trend line, but it was just setting up pretty as a great short area. Of course the DOW took out the 50% fib without a re-test, so I guess I shouldn’t have expected much here. One thing to note here, it did not approach yesterday’s high, so it was an inside day, not a very encouraging bull signal.

Of course we all know that the SPX is a much better overall measure of the mkt. So I see here that it is still under resistance, but it looks to be forming a loose bull flag. Therefore, I would be looking for a break to the upside, but I will be ready to short on a break of the 1116 line.

The NAS has really defined resistance here this last three days. So the trade here is pretty simple, a close above 2294, I will be looking long, but more sideways or down then I will be shorting probably beneath yesterday’s open.

I spoke of the disconnect between the UUP and the mkt. lately, yesterday. So here the UUP was up .55% and the mkt. was up almost as much. So I did a little research and I found that…

… if you look closely where, theoretically, the UUP and SPX cross, you can see that it is not uncommon for them to move for a day or two in the same direction. The black candles are the SPX the blue ones are the UUP. You can see in July / August when the SPX really started moving up the UUP started dropping, and at about that time frame they crossed. There the UUP seemed to lose momentum for a bit. I don’t know if this is happening again, and I don’t understand why it would, but I look at a lot of mkt. history to see how it acted before, and I noticed this. So it may be the two are set to cross again and that is why this apparent disconnect is showing. Or I could be wack!

I talked about XLE as a possible short yesterday as it had some nice reversal candles on resistance. It ended up down today over .50%, on a mkt. up day. So I thought we would look at a couple of energy charts. This is NOV and it had a big bearish doji hammer engulfing candle, or a bbdhec for short. Speaking of short, methinks this is one.

I also like HAL as a short set up. This could be a double top, but it certainly is a bearish engulfing on decreasing v. I like those type of set ups.

I like trading DVN, as you can see by this chart. I used to trade HAL a lot, but lately not so much. Perhaps tomorrow will be another opportunity. Back to DVN; This is simply another bearish engulfing a hammer. It feels pretty bearish here to me, even though it rallied off the lows. I would like it if it opened just above the close or gaps down a little.

In closing: I think tomorrow will be a  pretty important day for the VIX to give me a little direction. Further, although the DOW did break out above the trend, the others have not, and the DOW stayed beneath yesterday’s high. I am still not full force bullish, still cautious and watching for cracks in the rally. Trade well and prosper. AKOT
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A lack of volume leads to a lack of conviction

It is no secret the bulk of the mkt. moves each day is the first hour and a half and the second hour and a half, but it seems to me that it has even been more brutally true this last couple of weeks. Usually you can snipe a play during the lunch hour, or around 2 pm., but it seems to me this mkt. has been very tight during the middle of the session. Today, for instance, by 11 it had moved right into its range for the day and traded from 1113 to 1115 on the SPX for the rest of the day. Now, I won’t sit in front of my computer all day trying to force a trade, so I have been waiting for the open and right before the close to make my trades. It seems to be working right now.

Today we took out some resistance, and I will be watching for follow through with some v tomorrow. This weekend when I was looking through hundreds of charts, I saw a lot of potential head and shoulder patterns setting up. They weren’t there, which is why I didn’t post most of them, but I was watching for them to materialize. If we get more of today’s action, then I will be looking for more breakouts instead of breakdowns.

The VIX continues in its down-trend and there really is not a lot in the way of support. The arrows point out the two levels that kicked off the last move up. The VIX has been very volatile itself and coming off that big down trend, I still think this is forming a bottom, albeit a time-consuming one. So watch $17.50 & $18.50 levels for logical bounce areas.

The DOW has once again butted its head against that long-term down-trend line. Volume is about average, but I think it will need a bit of a v pop to break out. I don’t know if it has the v behind it to make it happen or not, but it is close enough that tomorrow should be the key. I am looking for a close above, not just a move above.

This is the SPX. It had a definite breakout day today, taking out February’s highs. I have highlighted what looks like a very sloppy, mini inverse head and shoulders formation. If I drew the line truly from left neckline to right neckline, the SPX would be right at the bottom of that line today. It looks strong, but often these are re-tested before the true breakout.

The NASDAQ filled the gap and then some. The indicators are trending up, sans the histogram which is rebounding a little of the recent down-trend. This was an impressive move, over 1% up today, exceeding both the SPX and the DOW. I think we have to watch for follow through, perhaps after a re-test.

Check out the resistance line we have been watching for a while now. The UUP reached up and touched it once again before falling. Most of the time, strong resistance like this requires the stock to move down a little and make another run at it, preferably gapping above it. I think the UUP might be there right now. Unless it has a huge v pop, I think it will fall a little before making another run at 23.88, and breaking through.

Here is a clean chart of the QQQQ, you can see the gap above the down-trend line on okay v. None-the-less, this is a breakout and as long as the bottom of that gap holds this should head higher.

The SPY also had a breakout. My only issue here is the declining v into this up move. I wouldn’t mind it so much if it was flat, but it is clearly in a down trend, which creates a divergence. This surely could move up much more, but before I buy long-term I need to see some v behind the move.

I spotted this potential double top this morning. Technically, it did break above the Jan top, and with decent v, so it may be broken. But, I don’t think it is enough yet to call it broken so I am going to continue to watch it. I really like double tops and bottoms for decent size moves.

I twitted this one a while back as a trade off the up trend, and it is making its move. I would love to see some v and the indicators turn up, but this move may be over by then.  A little riskier trade because of that, but I would use today’s low as a stop.

Another breakout with strength. BDK mad a strong move today on average v. I think this move has legs and BDK is heading for $80.

In closing: We have our lightest data day of the week tomorrow, so I will be looking for another trend day. The econ. news continues to be consistently wte, but the mkt. clearly shrugged that off today. I don’t expect that will continue all week, although when we look at the indices, other than the DOW we are seeing breakouts. In my mind, breakouts are best traded on re-tests, so that is what I would like to see. Trade well and prosper. AKOT

Hoops got in the way.

Sorry about the late post once again, but it has and will continue to be an extremely busy week for me. Tonight I sat through three High School hoops games, and I am fully convinced if they had terrorists sit on those hard plastic bleachers, packed in with hundreds of hot smelly athletes and parents, for a day, they would confess to anything we wanted.

Today was a really good day for me. I sold my all my puts about 30-45 minutes into the day. I then didn’t think I was going to trade any more, but then things looked like they were starting to lift, and after I saw the bull flag forming on the ES, I went long with some 110 SPY options. So I am sitting on those overnight. Now I am not sure if holding them overnight was the best plan, because I really think we are seeing some reactionary selling again, and with the news coming out pre-market tomorrow we could see more of the same. However, the fact that there was some strong buying into the close left me thinking the risk / reward was worth it.

The VIX actually looks like it is in a bear flag type of mode. It looks poised to either drop or stay sideways here to me.

The SPX is still in a down trend, and the histogram is still trending down ever so slightly. The RSI is moving into the over bought zone leading me to think this may continue down to sideways a bit.

One of the reasons I went long was the UUP. Remember I talked about this resistance, but I thought it wouldn’t take much to break through it? Will we got close, but then the UUP started loosing steam quickly, and originally the strength of the dollar seemed to be the main catalyst for the market drop.

You can see on this 30 min. chart the doji cross, followed by strong selling that caused me some pause.

This is the chart I was watching when I decided to go long. I liked the three strong rising candles ( 5 min. chart) then the consolidation, which was a pretty clear bull flag gaining strength. I figured I would use 1095 as my stop, so the risk was very minimal. But, holding overnight increased my risk profile, so will see how that plays out.

Shippers were strong, even in the morning today and I noticed this chart early on. I actually forgot about it and now wished I had not. If I had remember, I would’ve went long this instead of the SPY because I knew it already had some strength behind it going into earnings. A strong bullish engulfing off short-term support with indicators trending up.

In closing: I apologize for three short posts in a row, but like I said is has been a very busy week in AKOT’s house. My plan for the morning: See how the mkt. reacts to the econ. news, if it is an obvious over reaction, trade against it. If it is a slow-moving action, wait for a good entry and trade it. I think, unless we get way wte econ. news, the mkt. has digested some of the bad news with this volatility. So, considering today’s move, I will close my calls early in the day, and then trade against the first big move of the day, if it happens early in the day. If I don’t see it forming, then I will go into the weekend in cash. Trade well and prosper. AKOT

Late night Wednesday Post

We were looking for volatility today, and thanks to the “jobs” bill, we got it. Unfortunately, I think this “jobs” bill is nothing more than another type of stimulus package. All of the volatility came in the very first couple hours of the day, and then we pretty much flat lined the rest of the day. I was going to try to short that crazy bounce up, but I did not find a good entry point. I still think we have some more down movement to come, and I expect some directional days the next two days. Obviously we will have some pops and drops intra-day due to some minor economic news, although Friday we have Mich. sentiment and housing numbers again during open hours which considering the Tuesday numbers will probably be big mkt. movers. But most of the big news will be pre-market, so the brunt of the move will be digested in the futures giving us a clearer picture into the day. Let’s take a quick peek at some charts:

This is the DOW from Nov. 07. I did this to remind you of the long-term down trend line that was briefly breached, but appears to be acting as resistance again. If this was a failed breakout, then it will likely be followed by a pretty big down move.

The SPX had an inside day, ergo forming a bearish harami. Not the strongest of reversal signals, but a signal none-the-less. It looks like it is poised to test the up trend line once again.

The 60 min. NASDAQ chart shows that this new down trend line seems to be holding steady. If it breached 2288 with strength, then I think we take out the recent lows.

This is a long-range UUP chart, because I just noticed that the lows from December 07 acted as resistance this past week. However, I would expect them to act as stronger support than resistance, so I wouldn’t be surprised to see this taken out on a re-test.

In closing: As usual, I have to do a quick post on Wednesday night. I think, if anything, today’s up move could be a catalyst for an even bigger down move either Thursday or Friday. Of course this is contingent on the economic news that comes up, but I am starting to sense a negative tint starting to show up. Trade well and prosper. AKOT

stall and dive or stall and drive?

Okay, so when I said I thought today would be a directional day, I didn’t think the direction would be sideways. It does make sense though, no news, no events, not much to move the mkt. today. I thought it would linger up or down a bit, and I was leaning towards down, but this was brutal. I did get short on QCOM one of the charts I posted last week. It looks like the resistance is holding and I will be playing for some follow through with 40.0 as my stop. At least we have consumer confidence tomorrow, and a whole slug of earnings pre-market, and post-market for that matter. So not tons to say today, let’s let the charts do the talking:

The VIX, along with the rest of the mkt., has stalled out. This is the kind of action I expected to see around the 21 area. Oh well I guess 20 is close enough. All indicators still tanking hard.

The DOW is sitting on that 50% fib from the 07 highs. Volume was once again unimpressive. It sure feels like it is stalling out  here, but lately you never know. Still, for two days in a row it has failed to maintain the daily highs, by a long shot. Generally a reversal sign.

The SPX is still slightly beneath its 50% fib, and it too looks like the current up move may be stalling out. The indicators still look strong however, pointing to more up. A conflicted chart. I will be looking for more solid direction over the next couple of days.

Pretty much the same thing on the NAS. One interesting note here is the fact that it still hasn’t re-tested the top of the gap. Also note the slight down movement on the histogram. Often times this will be a leading type of indicator. If we see another down day on it tomorrow, I will be more confident of direction.

The UUP is slugging its way north. It is well above my up trend line, but I have noticed that the 20 ma seems to be acting as an up trend as well. I will be looking for bounces off of it until it is breached.

The QQQQ is sitting on the 50 ma, and though you can’t see it very well, the MACD is ever so slightly curving down a bit. The RSI is still strong. I will wait and see if this is a reversal or a breath for a run to past highs. I will try to catch the move either way.

I thought it would be timely to check out XLV, the healthcare spider ETF. Once again it is finding resistance at the $31.65 area. You can see since the January top, v has steadily declined, even the v pops have been increasingly smaller. Today was a nice v pop, which led to selling. I think this will hold and this will drop, but the best thing about it is if it closes above 31.70 I know I was wrong and I can close the trade, and maybe even reverse it.

There was a bearish engulfing formation today on XLE. However, it is on a long-term up trend line. But, there is also a gap to fill and decreasing v into this up move. Three points for the bears, one point for the bull. Watch for a break of the up trend and a gap fill.

This chart actually has a lot going on. There is a long term head and shoulder, a short-term “almost” head and shoulders, declining v with an increase today, earnings 3/8 and a bearish engulfing candle today. I think there is more down to come here, but be aware EBIX had a huge up day on 2/12 so there are buyers out there and if it drops they will have to decide if they want to buy or sell. If they sell it will fall fast.

In closing: Not much to say, things look tired again but could easily be revived by good news tomorrow and the rest of the week. I have meetings tomorrow night so I don’t know if I will do a post or not. Trade well and prosper. AKOT

Synchronized Signals

What a way to kick off the week. I could not see a direction for most of the morning, the breadth, internals, everything was up and down, but that didn’t last too long. Now the NAS already blew last week’s highs out of the water and was the early leader last week. I was looking for that big down day, and now, if we move up a little more, I will instead be looking for some consolidation, then more rally. I really want to be flexible and be able to grab some of these great moves. I missed out on today because I wasn’t ready and wasn’t by my computer when the move went off. You will note I added the MACD to tonight’s charts. I use the MACD a lot, for confirmation and direction, but I rarely put it on my posted charts. I do this just to keep the charts clean and easy to read. If you guys don’t like it, let me know and I will clean them back up, but let’s try it for a bit. On to the charts:

As I talked about yesterday, the bottom of that gap would be a logical place for the VIX to find support, and it did. The next most logical place is near 21.20, the previous low and the 50 ma. We could see a hold / bounce here, but if not we will likely hold in the 21.20 area.

One reason I put the MACD w/ histogram on these charts is to show how I look for confirmations. Check out this beautiful move in unison, its like synchronized swimming. Usually this will lead to at least a little upside momentum. However, at the blue arrow is some very obvious resistance, and I think it will be pretty decent resistance. If we take that out, I think we head towards 11,000.

You can see the same thing on the SPX. I took the liberty of pointing out some of these unison moves and you can see the corresponding SPX move. I see decent resistance at 1105.

Originally I thought this was a cliff walker; moving sideways off the bottom bollinger band. But then it took out the top of that big black candle and is nearing another resistance line. This looks strong, very strong, but strong moves often have a pause and that is what I am watching for.

The RUT looks even more impressive than the NAS. It has already taken out the 20, 50 and previous high. I would be watching for a buying opportunity on any small pullback.

The UUP really gave up the ghost today on light v. It makes sense for this to drop to the 200 ma and hold. I think when we see another big v day, we see another big up day.

I still like BWLD to head to the $40 area. It was weak on a very strong day today, and all the indicators are still signaling a drop. I do think it needs to move sideways or up slightly for a day or two before falling more.

I like this simple chart. Strong up move on earnings, gap down move up a little more the next day, then a bearish engulfing today. I think this is headed to $7.

In closing: The RUT and NAS look very strong, and the SPX and INDU are very near looking strong. I think the key is whether the SPX will take out its previous high. If it does not, then I think it will drag the others down with it. If it does, then I am going long. Trade well and prosper. AKOT

Turn up the volume

First some house keeping, I forgot to let you know that once again I will be traveling from Wed. – Fri. Further, during the day I will likely not be able to watch the mkts. as closely as I normally would. I will be in meetings all day, and I will look at my iphone as much as possible, but it just isn’t the same. So I don’t know if I will have my normal two more posts this week or not. Stay tuned!

That leads me to my next trip. At the end of next week, 1/ 15, we will be heading back to Costa Rica for a mini vacation. Last year I was able to post a few times from there, but to be honest I wasn’t as “in tune” as I should have been, so I kind of backed off. We will be traveling a lot this time; much more exploring and looking for some opportunities. So I doubt I will have tons of time for posts, but if I see something, I will make time. I will make sure and tweet all new posts. Perhaps I will throw up some CR pics as tweets, something different eh?

Now on to the business at hand. I really expected us to see a trend forming, and instead we get more of the same, a whole lot of nothing. At least we had some intra-day movement. I have noticed that v is slowly creeping up, but it is really moving on certain sectors. I noted the strength in energy and financials this morning, and usually these two can lead the mkt. Today, nothing led the mkt., it just was. Now last year, we had a very similar set up coming out of Jan. and that led to a big sell off. If we see a white hammer tomorrow, then we will be looking at an eerily similar set up. Now I am all excited! You know how I love mkt. history. Let’s look at some charts:

Well it looks like the VIX wants to get to that $17 area sooner than later. Considering we did not have a huge up day today, this is pretty bearish. It has been trending down like this, and I would expect some follow through to the downside, at least one day.

Normally this would be an okay start of a reversal pattern, but lately I have not been trusting it. All you have to do is to look back at Nov. to see why. It makes sense to take a breather after a day like yesterday. You can see resistance all over the place, bollinger bands, down trend, up trend, and the v is nothing to shout about, but it is slowly moving up. If the VIX drops, like it looks it might, then I could see us taking all the resistance out pretty easily.

The SPX looks much stronger than the DOW or NAS. A decent up down continuing from the previous day’s move. Right now I don’t see a technical reason for it to stall out. The boll bands are opening the skies.

The NAS poked out to a new high but could not hold it. Note how the RSI is still cruising up. Again, normally I would be expecting a reversal to the downside in the next couple of days, but the way things have been lately, I am not sure that is what we will see.

For a single candle, the RUT looks most likely to stall out this current up move. Even the RSI looks to be heading down a little. Keep on eye on this, remember how it was leading the down move, and then led the up move. This may give us a little heads-up.

The UUP held steady; I thought it may drop a little here before bouncing but it was pretty much flat and made a spin top doji which could easily signal a short-term bottom. I didn’t post the chart, but the EUR/USD looks pretty weak to me right now. If it takes out the 200 ma, we will see a big move.

There was a nice bearish divergence with v and the up move here into resistance, but v has been increasing. I will be watching to see if this resistance holds, that will lead to good short trade.

I find this chart intriguing. Huge v spike, with hang man in context. This should be bearish or at least signal a slow down in the up move. But when I looked at the 5 min. chart…

… you can see that, by far, the breadth of v came with the up move into the close. That is a pretty bullish sign to me. So in light of that, I would imagine we see another pop up tomorrow on XLK.

In closing: We are in a battle between history, fundamentals, and TA. Which one will win out? Stay tuned. Trade well and prosper. AKOT