Tuesday, June 16, 2009

Could It Be?

It may very well could be. The VIX closed above the 20 dma yesterday and today there is a very good chance of it confirming a change in market sentiment if it can have an up day. This, along with the SPX chart showing a breakdown by breaking through the 20 dma and the 200 dma just 6 pts away. A break of 909 could signify a major retracement.

But this could also be a head fake trying to luer the bears back in as it marches up. If not, then I find it interesting the rally came to a fizzle instead of a bang, much like the drop to 666 where everyone expected a big bang to signify the end of the downward movement. to me, that is just telling us that this is indeed a bear market and the lows will be tested and probably broken this year.

But lets wait and see before we get carried away. I am still playing it cautious with things like TBT, EEM and CAF, with just a little bit of SRS. I am short KRE and AXP.

Watch the dollar. I have to believe on any significant move down in the market, it is probably just following the dollar moving down and oil moving up

1 comment:

  1. FWIW...


    Also from today’s Rhodes report:

    yesterday there is enormous chatter coming
    out of the Chicago Board Options Exchange over a trader
    putting on a rather large $850k in premium for a July VIX
    call spread – which implies a rather “large” market swan
    dive over the coming 41-days. The trader bought 20,000
    of the July 45 calls and sold the July 55 calls for a “net”
    42.5 cents – this means the VIX must be at 45.42 before
    this trader earns even one cent on the trade. Some certainly
    seems to be sure that a larger decline is directly ahead –
    and very sharp one at that given the VIX is only trading at
    30 at the present time. The last time the VIX was at 45 was
    the week of March 27th…when the S&P was in the low-