No Frills Friday Road Map

Here’s a quick no frills update for my stainless steel rats. I’m not yet happy with the way this is playing out and although I may be over-thinking this whole affair I’d like to share a few more charts you ought to see.

No matter what happens, I sincerely we don’t wind up like this poor fellow…

Mr. VIX pushed outside its BB during the session but fortunately closed inside. Too much of a rise in VIX can be too much of a good thing and this benefits the bears as we got spared a first leg into a VIX buy signal.

This is the chart that bugs me the most tonight however. The red readings on the histogram have been rather mild and at the end of today’s session we actually saw some green readings. If we are heading into Minor 3 we should see something a bit more pronounced here. Of course price action will dictate in the end, but the evil lair is officially in DEFCON 4 mode.

NYSE A/D ratio closed in ‘meh territory’ at 0.77 – yes, bearish but nothing to really write home about. The Dollar however is pushing up nicely and although equities may fade it for a while (just like last December) the bulls will eventually start feeling an uncomfortable squeeze in the loin area if ole’ bucky continues its trajectory upwards. So keep following your DXY or EUR/USD charts – a strong Dollar is concentrated kryptonite for equity bulls.

Wave Count

If we drop tomorrow (Soylent Blue) I expect dip buyers jump into the fray around 1070 – unless of course we get a large gap down but thus far the futures look actually slightly bullish. A retracement would probably get us close to the 1100 mark.

If we open higher tomorrow and run up things may accelerate quickly – be prepared for a run up back to the 1120 cluster. Should be scary enough to once and for all cure any bullish inclinations the small remaining number of toilet paper holders may have afforded themselves. And yes, I expect it to be a final shake out and for the bus to leave with only four people in the cheap back seats.

Bottom Line

Whatever happens – stay frosty – this bull is in a crappy mood and you better strap in for a rough ride. The bulls may throw us a curve ball here – dig deep and use it to add long term short positions if you have not done so already.

Cheers,

Mole