What Goes Up…

It’s FOMC day and after Bill Dudley apparently muttered something about Bitcoin crypto currencies across the board exploded higher. BTC right now is pushing > 11,200 and there’s no doubt that it’ll be at 20,000 by the end of the day and 1,000,000 by Friday. Alright I may be using a bit of sarcasm here but I assure you that it’s not out of butt hurt (as I’m still holding a few coins) but due to tragically being equipped at birth with common sense and even worse, a relatively functioning memory of financial and human history. I know, it sucks to be me but someone’s got to carry that burden.

And yes I do in fact do birthday parties but not in clown suits, so don’t get your hopes up GoldGerb. Now, I’m don’t even know if anyone is going to be reading this post today as everyone is probably too busy buying BTC at 11,000, right?

Alright, enough with the crypto bashing. Y’all know I’m on board with crypto but I’m definitely not on board with buying into exponential charts. Because there’s not enough vaseline on this great earth to soothe the latex claden finger of God that is heading toward the crypto market. It’ll be ugly and painful, but for a few stainless steel rats with foresight and a bit of patience it will be most glorious.

Now since it’s FOMC day let’s do a quick momo update, shall we? Equities are clearly jealous of crypto currencies and don’t want to play second fiddle when it comes to short squeezes. Breadth on the SPX remains in elevated territory but by no means does it signal a reversal on the horizon. Plus the most recent one was simply ignored.

The CPCE has been locked in a small range since the summer, suggesting that the bears pretty much have thrown in the towel at this point. And who could blame them? No worries, eventually there will be a price to be paid but judging by similar conditions throughout the first half of 2015 it seems the current squeeze higher may continue unabated for a while.

The VIX is telling a similar story. My IV expansion chart is showing us in a range comparable to that of 2013 through mid 2014. Meaning no extreme levels, just a slow churn higher without giving the bears anything they could sink their claws into. What we want to see here is a clear breach < -40 followed by a few closes > the 0 mark. Don’t get your hopes up though as it may be a while…

If you’re warmed then join me in the lair for the good stuff…

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