Business As Usual Monday Wrap Up

And here we are again – Scott and evil Mole eagerly anticipated today’s tape and it pretty much turned out as expected. Maybe less fireworks than hoped but here we are closing at SPX 1328 again. Forget about cross index divergences – the bears seemingly lost another battle and it’s POMO business as usual.

The ZL was on fire today – it never believed that mid day drop an started to paint a small but textbook divergence. I did not recommend long positions as the signal was way too weak. I however pointed out that we may find ourselves at the top of the StdDev line should we make it above VWAP. And that’s exactly what happened – the top was touched a few minutes after NYSE closed up for the day.

Geronimo was very quiet today – not a single trade. Which makes me a bit uneasy about the long side if I’m honest. I would have preferred a stronger more confident long day. Of course this may all be strategic and thus intentional – after another opening gap tape like this gave the bears hopes for a late day reversal. Instead however we closed near the highs and if you been holding puts you were put through another vega squeeze.

But wait there is more… read below if you’re a sub:
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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That’s right – we got final confirmation for a bonafide VIX buy signal – it’s official. Well, quite honestly we got that confirmation on Friday (which is the chart above) and today’s push down to 18.35 almost seals it. These signals are usually quite reliable and it’s quite possible we’ll push toward VIX 14 in a jiffy.

I have not shown this chart for quite a while – I nicknamed it my CPCE Deluxe chart. The CPCE is a put/call ratio on the CBOE and my version has in the past provided important clues as to where support/resistance zones may develop. Well, you got to hand it to the grizzlies – they somehow managed to not produce a veritable take down for months and all the while this indicator has pushed back into bounce territory. That’s right – we now are finding my slightly smoothed signal at a diagonal bounce line. Should this one be ignored all bets are off of course – but until we see anything bearish over on the equities side I wouldn’t want to hold my breath.

And there you have it – I am not going to try to make any haphazard predictions but thus far it seems to me that the bears wasted yet another opportunity to rise from hibernation. Better luck in late spring maybe? How much more punishment can bears take? Have they become extinct after their hunting grounds have been invaded by Banana Ben’s POMO Monster? 😉

Cheers,

Mole
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