Now Reading
Houston, We May Have A Problem
104

Houston, We May Have A Problem

Houston, We May Have A Problem

by The MoleAugust 16, 2019

We’re past the half-month mark and since the current gyrations aren’t exactly conducive to anything outside of playing the swings I thought it would be a good idea to go over our momentum charts. What I found is rather worrisome on a medium to long term basis, albeit there is grounds for optimism more short term.

 

Let’s start with the latter and then we’ll zoom out and review the long term picture. On the surface yesterday’s bounce and continuation in the futures overnight looks positive. However a quick glance at the chart above and the increase in realized volatility is palpable.

NYSE volume does not reflect much confidence and although I do believe that continuation over the next week has reasonable odds (i.e. 65% plus) I am not jumping into long positions here.

SPX:VIX started to point higher yesterday – let’s see if this continues.

Okay, so the first glaring signs of trouble occurred when a bona fide VIX Buy Signal was almost disqualified. My rule is that a breach > the recent spike high on the VIX must occur. Which means a push in the VIX to > 24.75 would open the door to much ugliness.

ROC on the VIX is also concerning. What usually happens is a drop to -40, a punch higher > the 0 mark followed by a correction and then a drop back to < the 0 mark. However over the past few months ROC has remained stubbornly > its 0 mark and is now pointing higher. This usually does not end well.

Much more waiting below the fold for my intrepid subs:

evil_separator

It's not too late - learn how to consistently trade without worrying about the news, the clickbait, the daily drama and misinformation. If you are interested in becoming a subscriber then don't waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Please login or subscribe here to see the remainder of this post.

About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

BTC: 1MwMJifeBU3YziDoLLu8S54Vg4cbnJxvpL
BCH: qqxflhnr0jcfj4nejw75klmpcsfsp68exukcr0a29e
ETH: 0x9D0824b9553346df7EFB6B76DBAd1E2763bE6Ef1
LTC: LUuoD6sDWgbqSgnpo5hceYPnTD9MAvxi6c
PayPal: https://paypal.me/evilspeculator