As we write about over and over, overly fast down action got stuffed.
On watch for a possible big brake down day. But just watching.
Thursday, September 29, 2016
Little Sell Day
Today was a great example of balancing the prior day's inventory in a liquidation type fashion.
As we write about over and over, overly fast down action got stuffed.
On watch for a possible big brake down day. But just watching.
As we write about over and over, overly fast down action got stuffed.
On watch for a possible big brake down day. But just watching.
Wednesday, September 28, 2016
Monday, September 19, 2016
Tuesday, September 13, 2016
Down and Pause
And back down the market went. But this time there were a few holes in the bearish case as the Nasdaq was severely diverged relative to yesterday's range -- and that spelled trouble for the sellers.
The daily is now becoming interesting as a mongo coil in the making. And that may mean a lot of up or down is in the cards. Will the bulls pull it off once again? Or will sellers re-emerge?
The daily is now becoming interesting as a mongo coil in the making. And that may mean a lot of up or down is in the cards. Will the bulls pull it off once again? Or will sellers re-emerge?
Monday, September 12, 2016
Two Way Auction
Like, why did we even out think it?
OF COURSE, buyers would step in and pound the auction higher!
The big clue, and we noted it in the slides, was the price liquidated to a major visual support zone -- and that was it. Too mechanical to be real, honest to goodness, selling.
OF COURSE, buyers would step in and pound the auction higher!
The big clue, and we noted it in the slides, was the price liquidated to a major visual support zone -- and that was it. Too mechanical to be real, honest to goodness, selling.
Friday, September 9, 2016
Firm Trend Day Down
Ha, Scott-Trader! The dreaded 11'ish VIX was indeed a canary in the coal mine.
So we finally got the monster sell day and the VIX promptly flies back up into the range.
With the market so short, we are always on watch for a powerful move back up. After-all we are firmly still in an uptrend.
On the flip side, a few more days of selling would not surprise us at all either.
Structural Analysis:
It's really important to detail structure on day's like this, because there were some huge tell tail signals that tipped off the astute trader to take advantage of the fierce downtrend.
1) As we noted, VIX was at range lows extreme, and had been low like this for an extended period of time. I read on Thursday that the last 40 sessions were the tightest in history. As the rule goes, the tighter the action prior to a breakout, the bigger the break -- and we were on watch for this.
2) Upon the market open, TICK exhibited extreme readings of almost -1800. Yes, almost -1800. Readings like that simply do not come along very often and when that many sell programs hit the tape, then a short bias is in play. Especially if the readings and price are not firmly rejected relatively quickly. The market just balanced and then proceeded lower.
3) After the session's 1st hour SPY was 4x relative volume. Other majors over 3x as well. This volume was the fuel for a major move.
4) A/D sediment extreme -2500+
5) Not even close to a +600 reading in TICK until the final hour. This is as skewed as it can get.
6) Rocket ship VIX: Grinding higher the whole session and ending up a whopping 40%
7) The price action itself was grinding lower. Compare this to liquidation movement that is prone to over extension and reversal. Price did not liquidate lower until the last hour.
Now for some slides:
So we finally got the monster sell day and the VIX promptly flies back up into the range.
With the market so short, we are always on watch for a powerful move back up. After-all we are firmly still in an uptrend.
On the flip side, a few more days of selling would not surprise us at all either.
Structural Analysis:
It's really important to detail structure on day's like this, because there were some huge tell tail signals that tipped off the astute trader to take advantage of the fierce downtrend.
1) As we noted, VIX was at range lows extreme, and had been low like this for an extended period of time. I read on Thursday that the last 40 sessions were the tightest in history. As the rule goes, the tighter the action prior to a breakout, the bigger the break -- and we were on watch for this.
2) Upon the market open, TICK exhibited extreme readings of almost -1800. Yes, almost -1800. Readings like that simply do not come along very often and when that many sell programs hit the tape, then a short bias is in play. Especially if the readings and price are not firmly rejected relatively quickly. The market just balanced and then proceeded lower.
3) After the session's 1st hour SPY was 4x relative volume. Other majors over 3x as well. This volume was the fuel for a major move.
4) A/D sediment extreme -2500+
5) Not even close to a +600 reading in TICK until the final hour. This is as skewed as it can get.
6) Rocket ship VIX: Grinding higher the whole session and ending up a whopping 40%
7) The price action itself was grinding lower. Compare this to liquidation movement that is prone to over extension and reversal. Price did not liquidate lower until the last hour.
Now for some slides:
Tuesday, September 6, 2016
VIX South of 12
I really miss blogging, but in this environment I'm only taking a few day trades per month. And there are a few days of decent action here and there but I've shut down my practice for the most part.
This metric puts me out of business for the most part. This is the 5 year chart. We are now below 12!
The good news is that there are spikes higher off of the lows up to the 20 ish range but who knows when? Hoping that the fall ushers in some increased volatility and participation. But I'm not holding my breath.
That being said, today was a decent trading day. A classic check mark pattern printed after the holiday.
A 13 point distribution actually not all that bad for sub 12 VIX.
This metric puts me out of business for the most part. This is the 5 year chart. We are now below 12!
That being said, today was a decent trading day. A classic check mark pattern printed after the holiday.
A 13 point distribution actually not all that bad for sub 12 VIX.
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