We have VERY clear negative divergences in the market averages as well as the Index futures, those are confirmed by positive divergences that are even stronger now in VIX futures and the derivative assets like VXX, UVXY, XIV, etc.
The consistent news is that I don't see this as any significant change in expectations, NO the VXX call didn't take off yesterday as early as I would have hoped and as I made clear last night, "Don't expect much in the market today on op-ex until at least 2:30 as most contracts are wound down.
Often the actual price action after 2:#0 as the op-ex pin action fades, is erratic, but the underlying trade is very often very useful in determining where we pick up on Monday. Yes Monday is Columbus day, banks will be closed, but the market open so expect volatility on lower volume, it's really an ideal area for a pullback to take place.
In any case, I'll get charts out, but negative divergences intraday have set in. I'm expecting some downside in to the close, short of that, then Monday.
At this time I do NOT intend to open other positions because of the expectation of a short duration move and the wild card of government over the weekend, so far I just have a spec. size VXX call.
I'll only add additional positions if they are really standing out.
Charts coming...
Is interest rates about to start going up?
-
Yes, I know - it does not make any sense - FED is about to cut
rates...but....real world interest rates are not always what FED wants it
to be.
5 years ago
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