Finally, some movement. It could be C news, it could be FDX being “cautious” it could be the strong dollar, it could be all together, or maybe it was the
but at least something happened. Last night in my rush to get the post done, I forgot to put the UUP chart up and instead threw it on Chart.ly. It looked ripe for a bounce, but this morning I tweeted that I thought $23 would be key resistance, we’ll look at that chart.
So far this week we have had 34 companies report earnings, and all but three of those have done bte. That should be bullish, but if you dig just a hair further, only 3 companies gave upside guidance. The rest gave mixed guidance, or were unsure. FDX beat, but their guidance was unclear, and as goes FDX usually goes retail and more, so that is quite often a mkt. mover, and I neglected to catch they had earnings today, my bad! However, nothing has been moving this mkt. so I would’ve likely ignored it anyway.
Tomorrow is 3f (opt xp) so I did a quick check, since January we have had 6 closes up and 5 down, pretty even. So to be perfectly even tomorrow should be a down right? Who said things are ever even in the mkt? More importantly, 3f is known for its “volatility” and this year we have had 6 closes of 50+ points from the open, either direction. Further, we have had 7 days of a range + 100, and 3 of those days were + 200.
However, if we start from the current bottom in March, things have really not been that volatile. Only 1 close +- 100, and only 2 closes +- 50. The range has averaged 111 points from that time, with a low of 71 points and a high of 171 in August. Finally, last month the range was 71 with a close of -9 points.
So what does it all mean? Well to me it seems to point that there is a clear dissipation of volatility as we get deeper into the year. So, using just this data, my best guess would be that we have a range in the 60-100 point area and probably close up somewhat ( the last part I base on charts, so let’s look at them shall we?)
The VIX filled a whole supp / res range today. I like that it did not leave a gap to be filled, because last time it filled that right away. I will be watching for follow thru, but not counting on it. Again, still no clear direction.
We had a clear breakdown of the INDU. Not only did we take out the support line, but also the up trend line. I imagine the recent lows around 10,230 will offer some support, and if you look you can see that any big down day in recent history has not been followed by another big down day. In fact, if you recall I have been saying to use the big down day as the sign of the current bottom. BUT that was if there was a current down move, which this is not. So this fits in with my 3 f theory of probably a larger range with a pretty small close, or a hammer type candle.
The SPX too broke through its current up trend line. You can see support in the 1085 area, but after that the rest of support is secondary to me until the blue up trend line. I don’t know if it will flat drop tomorrow, and I actually doubt it, but again, I could easily see a hammer type candle here would fit in with what has been happening. Any big body red candle will signal to me that we have a lot more down movement to come.
This is a steeper up trend and a steeper break, as would be expected. This actually looks pretty bearish to me, with a very close to shaved bottom candle gapping down. I don’t see a super clear support line, just a zone from the 2168 to 2128, I know huge. I don’t have my fibs on here, bu the nearest is at 2000, should be strong if we ever get down there.
I expect this will walk sideways to slightly up off this bbb. It is oversold and looks like it needs a bounce, perhaps it will use the 200 ma for that purpose, but I think it will bounce before then. However, I will be watching for small move days and that will be my bear flag formation.
You can see what I was looking at for the 23 resistance, and we closed at $23.01. Now, I would really expect a drop here, with a little more than 1/2 the v we have today. Perhaps even close to filling the gap it just made, and then looking for another hold and move up, in conjunction with the move on the eur/usd.
In closing: I am very thankful to have some direction, right wrong or indifferent. I really think we have more down to come, but will probably stall out some before that continues. I will throw some charts up on twitter and Chart.ly so be looking for them. Remember, I don’t trade all these charts. I look for the ones that go like I expected, and sets up the way I want for me to get a good entry. Further, I look at option volume, spreads and more to help narrow down my trades. Am I always right? Not even close! But that is why I love trades that have clear stops. Trade well and prosper. AKOT
