Thursday, June 25, 2009
I had expected the market to move higher, especially towards the end of this week.
I had NOT expected the vix to fall off this much however.
(in other words, I expected stocks to be bought, yet not too many calls)...as purchasing of calls is more indicative of FUTURE bullishness, not immediate short term. Window dressing is about last minute clean up, not future planning.
There only 3 prior touches on the VIX weekly, yet that is still enough to be a trend.
I will respect it, till it proves that it shouldn't be as any trend line should.
Is the vix bottoming here right now? I have no idea, But I will again respect the chart, till it proves otherwise. Also the last day the vix had a red candle this big (may 26th) the next day the spy fell by 2% (may 27th)
I simply can not feel comfortable being long the market looking at the vix weekly chart as it stands now.
Remember, when the vix bottoms...the market TOPS, that's how I look at it at least (link below w/ prior vix results) and the chart to me says there is a "CHANCE" the vix could of bottomed here.
I would love the most ideal of all to see the vix HOLD here at this level, and have the market yet still push up even a little higher into the end of June, then enter SHORT select names. (TIN, GOOG, MAR are 3 that come to mind I think will be great shorts for the summer time)
Maybe 26 on the vix does NOT hold....maybe it goes to 20, and the spx to 1000! (I have not a clue. Not trying to predict the market, just respecting what it shows me)
However the resting on that line is more than enough itself to make me pull back and watch/wait.
If the market moves higher into the end of June, hey great...it wont be with much of my money though. But I still do "hope" it does, b/c I believe it will be just giving a better entry to go SHORT in July.
Plus the #1 dimwit on CNBC (can't even remember his name, I think its King Cheerleader) was just yapping about 10x saying the recession is officially over, "ya heard it here first".
I see the VIX is a very popular chart today:
expecting and looking forward to reading many more thoughts on it
Posted by Erik at 8:13 PM