Earlier I was explaining that when we have a 1 min negative intraday divergence the chances are about 50/50 we either consolidate through time or correct through price, but when you have a 2 min chart join in, you almost always correct through price which is what we are getting now.
I'm going to say the probabilities look higher to me that we get a "W" bottom rather than a wide "U" shape, the "U" shape is already too distorted and the divergences look like the "W" bottom is more probable.
The VXX short positions we looked at yesterday just didn't have the price or the divergences to open a VXX short or put in to, today we may get that opportunity. I don't know if we'll have enough time in the day to look at long positions, it depends on how quickly we move toward the lows that would create a "W" bottom and how aggressively they are accumulated.
The last post gives me a lot of comfort in going long on a pullback, but at the right time. I think a VXX short or Put will come available first.
I took a quick look at leading indicators and they are surprisingly mellow for an intraday pullback. VXX is leading the SPX a bit which is better for a short/put position when we get to the right spot and intraday charts turn negative on VXX, the VIX futures from the last post seem to make that almost a certainty.
HYG was leading earlier, it's lagging a bit now, but not a big deal. Sentiment for a bounce has improved, it's not jumping off the chart, but there's a noticeable improvement, TLT is lagging badly, I suspect it will turn down before most averages turn up. Yields are leading the market (positive) slightly and HY Credit is subtle, but improving.
SPY 2 min chart (and many other averages and timeframes) negative here which tips the odds heavily in the favor of a price pullback, but the market wasn't going to accumulate much more with price moving up as I posted earlier.
IWM 2 min slightly negative, but there are decent signs for an intraday pullback. You can see a wide "U" shape is now too distorted to be probable, a "W" looks to be more probable, it's a stronger base, but takes a bit longer.
IWM 3 min, as price approaches the white trend line, we should see intraday charts lead positive, this would be the area to look at any additional trading longs,
VXX intraday is just about in line, this was badly needed for a position (short or puts), there risk:reward just wasn't there yesterday, today it's much better, but I wouldn't enter yet, however I think we may get an entry before the close.
VXX's 5 min chart has significant short term damage, so the rising 1 min. is fine, we want to get VSS as high as possible so long as the 5 min chart has this kind of damage. As far as timing an options position, we want the intraday 1 min that is above this chart to at least start going negative, hopefully VXX price will still be rising as that happens as the VXX put premiums will have a significant discount.
TLT already has a slight negative on the 1 min chart so I think it may be one of the earlier ones to turn down. I don't see or want a trade in TLT until it's in the $104-$105 area, then I want to look at it as a long, but I think that this would be near the end of a market bounce.
I'm going to see what else may be a possible position to open today, for now though I'd just be patient and let it come down toward a "W" formation as I drew on several charts earlier today.
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