Monday, September 12, 2016

Just a Blip on the Radar?

The weekend post is a day late, partially due to a busy schedule and waiting to see if there would be follow thru on Friday's decline.  As I have been pointing out for weeks, my preferred scenario for a top was a Jan-May 2015 type top which saw a lot of volatility within a range of about 100 SPX points, but thru Thursday there was very little volatility.  My indicators have been neutral for several weeks, so the sudden decline to SPX 2019 was unexpected other than a one day spike in VIX call buying on Thursday and a day later we are back to 2060. Still haven't adjusted DUST/NUGT for split.

The overall Indicator Scoreboard (Friday) has spiked up to the mean, well within the early 2015 pattern. Overall, the timing seems to be like early May 2015 where a pickup in volatility occurred before the run to the May top. Also the significant decline did not happen until two months later in July, which would be equivalent to November 2016.

The Short Term Indicator was also stopped at the mean.

The VIX P/C EMAs are also locked in a very tight range, again similar to early May 2015 and are expected to drop before a more significant decline.

Conclusion.  As you may have noticed my strength is not day trading, as I have found too often that whipsaws often catch you leaning in the wrong direction.

Weekly Trade Alert.  Still not willing to make any commitment.  Hopefully, I will be more focused when my outside projects are completed.

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