VIX Plunges Big Time

The VIX (The Fear Index) has plunged big time this week, this is a sign of trader complacency and lows or spikes down in the VIX often coincide with the end of rallies, this was a historical plunge.

Here's the chart and information

Quick EOD look

While the averages didn't move as far down into the 15 min chart as I would have liked to see today, we did see some of the biggest 1-day declines in 3C.

These are the biggest declines in the bounce so far for the respective timeframes, showing again today that distribution has continued into higher prices as I said I expected to see in my first post yesterday morning.

 IWM

 QQQ

SPY

INTC a Likely Victim of Window Dressing?

PArt of this rally and the timing of it is caused by Window Dressing, "The Art of Looking Smart" as March will end the first quarter Wednesday, this bounce/rally/whatever you want to call it, corresponds with the end of quarter results so hedge funds and others can present them to clients and prospective clients.

INTC is one stock they may not want to show as having owned and may move to sell it off before Wednesday of next week.

 Since the start of the quarter INTC is down 2+%, but down nearly 8% from the highs. This is a big stock and in most fund's portfolios. If there's a snowball effect of selling, INTC could fall quickly next week.

Here's a brief accumulation zone that's roughly in line with the market (a rising tide lifts all boats), but even so, INTC hasn't shown much relative strength and the distribution pattern is quite overwhelming during the bounce period (a perfect time to sell an unwanted position). INTC has failed to even keep up with the S&P and usually individual stocks will outperform the broader index.

Just something to take a look at.

Set for the next test

 DIA has given up a bit as it was as high as +.72% today, so far it's the furthest from the next downside support test.

 The IWM has started the test of a minor support level and thus far has broken below. The IWM was the a strong performer today up as much as +1.9%, it has given back a quite a bit.

 The Q's are also at the same area as the IWM and are at a gain of +.23% from an earlier high of .92%, perhaps showing some of the worst relative performance.

 The SPY has a little ways to go until the next test. The SPY were as high as .74% earlier.


After the last bounce shown with the Tick Index briefly trending up, it's now moving back to a downtrend as these averages test intraday support levels

Yesterday Portugal, Today Canada

I wonder how long it would take to organize a no confidence vote in the US targeting both the government and Fed?

Here's the Story from Bloomberg

Meanwhile, the no confidence vote, or rather no-fly zone continues in Libya; unless the Italians don't get what they want and quick.

Some Other Influential Stocks

AAPL

GOOG

PCLN

MArket Update

Some important tests are taking place and about to (in the SPY)

 DIA, all of the averages are looking like this, they are at important areas of support intraday

 The IWM has just breached it.

 Around 12:30 3C went very negative here and is now in a leading divergence.

 The Q's are furthest along below support.

 Also they have the worst looking 3C chart (5 min)


 The SPY is just in the area.

And the 5 min for the SPY.

Put this in the toolbox

Parabolic moves in downtrends....

This is just another form of what I've been calling for in the bounce in the market this week, that "scary" component. Yesterday I mentioned the parabolic move in the EUR/USD pair and warned that it'll likely fall as fast as it went up. The key here is was an established downtrend, so the move up is a shakeout. If there were no downtrend, then the concept is different. We'll discuss the differences when an example shows up, but for now, take a look at the move yesterday and today's subsequent reaction. It's a cousin of the false breakout, headfake, etc that we see so often in the market the last two years. It will get worse as volume declines more so it's an adjustment you have to make in your understanding of the market, otherwise you're likely to get bounced from an otherwise good position or miss an opportunity to take advantage of a nice set up that is occurring more and more frequently.

SPY and the DownTrend Line

My SPY target on the upside was $132, we hit $131.87, because of another day passing, the downtrend line today was slightly lower then $132, so as you can see above, the SPY actually did break above the down trend line.

The action has a negative bias, the TICK Index illustrates this as it was climbing earlier and is now trending down and into negative territory.

Plosser Wraps Up Q&A

And throws a bucket of water on QE3 hopes in doing so, the market is not going to like what this voting member said too much.

BIDU continues to get slaughtered intraday, down -1.8% in the last 45 minutes.

FXP intraday stabilized about the same time,

Also on the strengthening dollar, USO's (which I'm looking for a pullback in-th last 3 days it's been moving in that direction) intraday bounce has reversed course an it's back in the negative.

GLD did momentarily break support and is doing the typical volatility dance right in the area.

AND HERE'S THE MOVE IN GLD/SLV

Lets see if GLD takes support out this time and continues the leg down.

 GLD


SLV

UUP/FXE movement

 FXE ready to slip to new daily lows

UUP breaking out

Some Interesting Action in BIDU

Also GOOG is down on the day.

Syria

I talked about this in an email to a member this morning, it's just getting redundant to report every problem that picks up steam every day in MENA, but this appears to be a serious one. When I first heard that journalists were being escorted out of the protest area and detained, etc, I knew something wasn't going well. Later this morning "heavy" gunfire was heard around the protest area. It's likely there was just a massacre in Syria. I think that one deserves to be reported.

The Results of Deteriorating Margins

Last week it was NKE, this week RIMM, expect to see more as input cost rise and margins collapse, this is Bernanke's Chinese Finger Trap, he's boxed himself in.

NKE

RIMM

SPY Action and Target Zone

You can see why I chose the $132 area as my target zone, it breaks the flag and the daily downtrend line, it's a perfect place for a reversal. Right now the SPY is struggling or pulling back from that downtrend resistance. I'd still expect to see it hit though.

Don't forget FXE/UUP

FXE (short)/UUP (long) were a couple of trades featured this week. So far I like the way they are acting.

GLD is bouncing around between support and resistance as mentioned yesterday, SLV the stronger of the two is sitting just above resistance. I expect both will see continued downside movement from yesterday.

SPY TARGET

Here's the SPY target zone I published earlier in the week, we're pretty close @ $131.69

HDY Traders

I hope you paid attention to this post yesterday.


When a stock acts like that, something just isn't right.

Market Manipulation Madness

First of all, today's revised GDP is at consensus, so there's no biggie there especially considering it's nearly April. Last night however, RIMM's earnings call didn't go so great, their down over 10%. Sometime around then, this neat little note was released on Zero Hedge.

Someone Leak Something?

Something rather disturbing from a European trading desk...

TODAY TWO LARGE MACRO FUNDS OVER HERE HAVE GONE WILDLY LONG S&P. NOT LONG. WE TALKING 250% NET LONG. IT LOOKS LIKE CONCERTED ACTION ON GDP DGRADES FROM GS AND BOFA ARE THE LETTER DELIVERED TO BEN ON QE3. HUGE DIRECTIONAL BET WITH NEW CAPITAL PUT AT WORK. MOST LIKELY THE TWO INSTITUTIONS ARE COORDINATING ACTION WITH OFFICES IN CONNECTICUT. CHECK INFLOWS OF BLUE CHIP HEDGE FUNDS IN JAN FEB. APPLY 2.5 LEVERAGE. WE ARE TALKING ABOUT SOME 40-60BN PUT AT WORK PRIMARILY ON EMINIS AT THE MOMENT. WHETHER SOME EXTERNAL FORCE WILL LEAVE THEM HIGH AND DRY I DON'T KNOW. BUT IF ANYTHING SEEMED TO BE AT LEAST NOT TOO IRRATIONAL UP TO NOW, IN THIS THIRD WAVE, BE READY FOR REAL ROCK AND ROLL. 

I have to admit, the vernacular is a little strange a coming from a European trading desk, but it did its job last night pushing the ES contracts and the S&P to the 1340 area, well above our opening today. And, it seems quite a few people took the bait.

I really don't think there's too many institutional traders that would chase the S&P after a note like that and most importantly, IN AFTER HOURS where the liquidity is bad and the B/A is high. 

This looks like a real bag-holder trap and may be in part due to what RIMM looked like in after hours. In any case, it'll be interesting to see if today plays out as I thought it would per my explanation in yesterday's first post. If so, then you are getting a real feel for how the market works or rather how completely dysfunctional it is as well as a look at the Greed/Fear dynamic.