Wednesday, March 11, 2009

Is this Rally BS?

First, I want to say, I am still here. For those that know what I am talking about, I know what it is about now and it is concerning but I did nothing wrong so I am OK.

This is a great trading opportunity. Longs are fighting hard causing some good swing potential. As stated yesterday, VIX and S&P pretty much did things on queue. S&P rose to 730 and VIX to 43 before it halted and headed down, then bounced up and down all day, ending flat. VIX ended just above 43 and just above the lower trend line I identified yesterday.

But the kicker is that PCR was *extremely* high. It is smelling heavy of divergence and over confidence in the market by the longs that the bottom has hit. The PCR doubled today shooting way above the 20dma. Normally, this is bullish but with the VIX itself almost touching the lower trend line, this is a contrarian indicator as history has shown with the VIX that a reversal is in the air and will happen fairly soon (within a day or two).

So, I suspect tomorrow we get another run up in the market and then a collapse either late tomorrow or Friday (or Monday). Chartists are saying 740 is the resistance and if it goes above that, big rally ahead. I would agree but i am betting that 740 does not get breached tomorrow (at the close) and will trigger the next leg down .

But alas, I can not trade in this market due to.... Oh nevermind, can't talk about it. Do your own homework and enjoy the swings. And don't forget to set some stops no matter which way you trade. You can get crushed.


7 comments:

  1. u alright man? whats up?


    Erik78co@aim.com is my e-mail.

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  2. I hope everything works out for you. I enjoy your VIX and PCR insight and will definitely keep checking this site for it. Take care and good luck.

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  3. Hey, I too appreciate your input and analysis. You've got some great insight into the machinations of the market.
    Is the reason for not posting on yahoo anymore related at all to getting locked out of your account? Or are those two separate clusterf@$*s?

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  4. A question for you Brian... You were looking for vix of > 55 to get capitulation and a reversal. Do you still think that needs to happen or did the 52ish number represent capitulation and we may be headed higher? I have a lot to learn about TA. What resources have you used to learn it?

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  5. Hi Brian. I'm really sorry you're being hassled by the NYSE. I've been reading your comments for a while, and you seem like a good and honest man. I hope the NYSE clears you soon of any suspicion and lets you start trading again soon. I'll be reading your blog often, and I hope to see you back on the SKF (and SRS? and FAZ?) boards at Yahoo. Thank you for sharing your knowledge and opinions with all of us. Just know that you have lots of people wishing you the best.

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  6. locked out and yahoo are same issue. still working it out. the good thing is, I was notified today that i can liquidate if I want. can't buy. which is good for my march options.

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  7. Ben, I was expecting a VIX of 55 for capitulation and still do. When it hit 52 and reversed, it represented the reversal was going to be shorter than it really could/should be. And thus, this rally will not continue. We have to go through the lows we were at to wipe out the negativity and get a base in place so market can go up.

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