June Gloom Momo Update

I swear I can’t take a single day off without you guys making a mess of things. Now although I was busy with some code refactoring and bug fixing duties I kept a very close eye on equities yesterday just in case there may be a reversal play at hand. But what I’m seeing thus far leaves me with a rather mixed perspective. It’s time for a late June gloom momo update.

Let’s get the proverbial lay of the land first. Although the longer term panels are messy as heck right now we do have some technical context in form of a lower 25-day BB and 100-day SMA touch. The latter is now starting to point lower and that is not a good sign.

On the weekly panel we do have a stack of NLBLs starting a few handles below the magic 2700 mark. Which may give way but the real pain won’t kick in unless 2600 breaches, in which case we may go to 2500. The odds of that happening at this moment are still pretty low at around 25%.

As you can see the volume profile drops off pretty sharply after about 2700, but picks up again around 2680. Quite frankly I don’t see a huge volume hole here that could limit the potential of a sell off.

UVOL was really scary yesterday, as in there barely being any. This could be a sign of this sell off being engineered but I’m not sure yet and need to see if buyers step in in force today.

Momo Charts

Now I’m going to start off my momo line up on a happy note, meaning with the most bullish chart first. On the IV end VXV vs. the VIX has tanked sharply and quite often that leads to a small bounce. But as you may have guessed by now the rest of the gang is looking a lot more bearish so if you must do not back up the proverbial truck and stick with a portion of your assets you don’t mind losing on a lottery ticket.

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