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
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