Yes, we are already three days into May but this kind of analysis takes a good mixture of time, attention, caffeine, and inspiration. But I think your patience will be well rewarded as we’re going to look at some rather fascinating charts. Now two weeks ago I posted a quick update which suggested that we may be at short term lows (on a daily basis) and that a reversal to the upside had good odds. Which is exactly what happened the Monday after when equities painted a big gap higher. You’re welcome, but thanks don’t pay the bills, so instead just sign up as a paying member and we’ll call it even
Apparently the odds of seeing any type of resolution before the long Easter holiday weekend are low (what are the odds I will eat my words on that one?). Which gives me an opportunity to dazzle you guys with some rather thrilling implied volatility (IV) charts. So strap yourself in and make sure you do not extend your hands or legs outside the carriage until the ride has come to a full stop.
Things continue to progress nicely for us on the trading front and I decided to not push my luck by entering any additional campaigns today. After all correlation risk is significant in this brave QE world as currency driven moves usually affect symbols across the board. Besides everyone and their poodle seem to be bullish right now, and to once more quote the great Mark Twain: “Whenever you find yourself on the side of the majority, it is time to pause and reflect.”
It is the first trading session in November and that means it’s time for another momo update. What I’m seeing across the board reaffirms the current low participation holding pattern which I proposed in my last update. Various attempts to break even modest support zones have failed and in the process consumed almost all short term bearish momentum over the course of the past few weeks. Although I am still holding short positions from near ES 2150 my perspective now has shifted toward short term bullish and long term bearish. Let me tell you why.