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.
People keep writing me asking if this rally is real or if they should be paying attention to all that bearish talk they keep seeing on the financial news. Quick answer: Yes, of course it’s REAL because it’s happening. And you already know my general views on listening to anything coming out of the MSM. Whatever they are telling you has little bearing with reality and usually only serves as a plausible explanation of events triggered by factors far outside our horizon. So in other words – it’s bullpucky and you’re better off watching your goldfish for valuable clues as to where the market may be heading next. Or let me make it even easier for you: