click chart to enlarge
click chart to enlarge
VIX watch. We can pronounce the panic dead when the daily VIX closes below this trendline on the log scale chart. That value today is about 61.5.
click chart to enlarge
A Base
October 30th, 2008 at 7:03am · 2 Comments
Here’s a pair of charts of market internals that show the nice bullish divergences present now that provide a base for stocks to move higher.
Tags: General Market Commentary · Market Internals · S&P 500
2 responses so far ↓
1 BearOfNH // Oct 30, 2008 at 11:52 am
Looking at the summer (left-green) base on the top chart, we saw a mid-July low followed by maybe 6 weeks of up/sideways action. But most of the move happened right off the July low and it would have been tough to make much money after that. Doable, but difficult.
Are we possibly in a similar situation, where the big rally has come and gone, the easy money already made, and future action more sideways than up?
In which case one strategy would be to sell a bull spread, say sell SPY 100 calls and buy the 105s. Net is about 1.60 before commissions and worst-case loss is 5.00 or 1/3 ratio, while the chance of SPY expiring above the 100 price is 1/4 according to Morningstar. A favorable trade, given the outlook above?
2 deacon31 // Oct 31, 2008 at 8:03 am
daily chart holy grail sales have worked well, which is a touch of 20ema when adx is above 30…SPX high o week there and QQQQ dropped 3% both weds./thurs. off the 20dema touch…if we think asia is leading us around, friday $NIKK gapped away from 20dema and thus we have our gap down right now…weekly adx is above 40 thus weekly grail sales will be above market as well
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