By gyrating sideways the odds for a bullish reversal in equities increased today.

Hey, don’t blame me – I don’t make the rules – I just work here…

That’s right – by closing below and inside its 2.0 Bollinger band the VIX satisfied phase two of an equities buy signal. If the SPX either moves sideways or pushes higher tomorrow we most likely will paint a lower close on the VIX – which would be final confirmation. A close above today’s would invalidate the buy signal and give the shorts another shot for glory.

A reader pointed out copper today as it gapped down nicely, steam rolling some [...]

You guys all know the old saying: What’s good for the goose is good for the gander.

Sorry bears – a red lamp just started flashing deep down in my evil lair:

Well, there you have your gander. We closed outside the 2.0 BB on Mr. VIX today – which as you all know is a first step toward an equities buy signal. We now need another close back inside, followed by a close lower the following day. Sorry guys – I don’t make these rules – they are established over time via empirical observation. And breaches like these often lead to a reversal within about a one week time frame. We all love those sell signals – thus we [...]

For the past few months the AUD/JPY has been key in tracking how capital would flow in or out of index futures such as the ES or the NQ. Whenever the spoos were either lagging or leading a snap back to the ‘AUD/JPY mean’ was almost assured – which made for a great reversion play. Recently however the game has changed – why I frankly do not know. As I am not a fundamental trader the nitty-gritty details of how carry traders play their nasty games largely elude me. I’m a simple market megalomaniac and the only thing that matters to me is that the correlation is slowly eroding:

Plus those swings on my stochastic are erratic and hard to follow [...]