Wednesday, April 17, 2013

The market wants more blood

More selling today. We made a lower low from Monday. VIX has now broken out of that descending wedge chart I posted yesterday. However, I still bought some XIV today at 20.5, but not looking for much out of it, have sell orders at 21.5, which I hope happens tomorrow.

There's some bullish bias which hints that we might atleast gap up tomorrow, if not closing in green. Anyway, I'm long ES and NQ. Long ES because of the reasons below, long NQ also because of the reasons below plus AAPL ADX > 65, so I'm thinking it retraces some, and possibly gaps up tomorrow.

Why bullish?

1. Positive RSI divergence on SPX.



2. We tagged and held 50 day MA today.



3. VIX rose more than 18% today, also note the topping tail on todays candle.
From cobramarketview - VIX up 18%+ in a single day, 71% chances SPX would close in green the next day, counting the last 2,000 trading days.




4. AAPL sauce



5. Extremely high Put/Call ratio - total PC ratio is the highest since november, and look at the VIX P/C ratio, super low, means people keep buying VIX calls and obviously they need to be punished.

  • Total Put/Call Ratio  1.19
  • Index P/C Ratio  1.15
  • Exchange Traded Products P/C  1.97
  • Equity P/C Ratio  0.79
  • VIX P/C Ratio  0.54

6. 2 Major distribution days - I will post more about this later.

Onto other markets..

Euro did the opposite of what I expected it to do today, and is now back down at the 1.30 level, but ADX > 60 on hourly, so as far as I am concerned, it held a key level and its a buy. However, I am also long GBPUSD for a trade, looking for about 30-40 ticks on it, lets see how that one works out.

Did not get a fill on July corn, but I might chase it a little here when it opens this afternoon? 

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