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December 1, 2010

Here We Go Again

And yet again the vexing VIX is in the process of painting an equities buy signal:

Question is this now – what are the chances we bust higher and NOT snap back sometime this week – thus producing the second and eventually third confirmation?

Let’s look at two other charts I find very interesting:

Remember that SPX:VIX ratio daily chart? Thus far it has remained spot on in supporting a continued melt up higher. However, what’s interesting is that sudden drop down (the blue line) which is often what we see during a period of distribution and an impending sell off.

The daily Zero is at an important resistance [...]

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October 3, 2010

Bullseye!

If you follow Eastern philosophy you are surely familiar with the concept of yin and yang. The symbol represents the ancient Chinese understanding of how things work. The outer circle represents “everything”, while the black and white shapes within the circle represent the interaction of two energies, called “yin” (black) and “yang” (white), which cause everything to happen. They are not completely black or white, just as things in life are not completely black or white, and they cannot exist without each other. And the underlying message is that there needs to be balance between opposing forces. As one side becomes over dominant a correction [...]

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September 17, 2010

Sleepless in L.A.

My apologies for the late post and a lack of participation today. After having no trouble falling asleep through various time zones and going to bed at unorthodox times even at local times during my Asia trip, jet lag suddenly caught up with me last night. I woke up several times and then snoozed until 10:30am PDT, missing half the session.

In some ways I’m glad actually as this has been one ugly session – everyone gets a tase with the ole’ cattle prod today. One chart however has been holding steady and I’m quite proud of it.

Every once in a while you just get it right – the upper line of the long term sideways channel on [...]

 
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May 9, 2010

Comfort Zones

Comfort, stability and consistency are highly regarded virtues when it comes to investing – maybe not so much for stone called stainless steel rats but we are but a small minority. When it comes trading comfort in particular is nothing but a silent killer – as soon as you think you have found the key to banking profits Miss Market will quickly step in and change the locks on you – sometimes in one single day. For she is a cruel mistress and will not hesitate to prey on us at any moment we show weakness and in particular complacency – and that applies to bulls and bears alike. Case in point – May 6th 2010 – a.k.a. Black Thursday.

As traders [...]

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2186Riders participate in the 74th "That Famous Preston Night" Rodeo in Preston Idaho, August 1, 2009. The annual event is billed as one of the region's biggest rodeos, bringing top riders and thousands of fans to the small southern Idaho town. Photo by Colin E. Braley
 
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Cognitive Bias Carousel
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    The tendency to treat money that has already been committed or spent as more valuable than money that may be spent or acquired. Also known … more
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