OPEX Wrap-Up

Berk here.

Another OPEX down.  Nothing too silly right?  Got a nice 130 point drop in $INDU, to only retrace 60% of it by days end.  Before a turn down.  Interesting.  As if there is some sort of signifigance of retracing 60(ish)%.

Here’s a little follow up of the chart I posted earlier.

Update from this morning's chart.

Should we get much higher than 1110, I will have to get more bullish (assuming proper confirmations).  I would really like to see a couple of weeks of drop ahead of us to pull down those indicators I was watching over the weekend.  Also note that as the chart above stands right now it is a running flat.  I believe that if we are tracing out a flat, that it will likely be an expanded flat (which I did not illustrate) perhaps targeting as low as the 1000-980 ($SPX) level.

The $VIX closed (also a weekly close) below my “bear-market break-out zone” channel.  This is not a good sign for the bears.  While it does mean that there is no fear, we all know that this can happen for an exteneded period of time.  I either need to see us back in that channel in short order next week, or I need to see a sell signal (confirmed) on the $VIX before I can expect more than a flat for this downside.

There was some interesting action as far as some indexes were concerned. $UTIL, $TRAN, $NDX, and $RUT all put in an intra-market divergence this week, as $INDU claimed 10K, and drug along $DWC, $SPX, and $OEX to new highs.  $NDX made a new closing high for the year, take it how you would like to.  I’ve said it before, and I will say it again.  Fractured markets typically reverse.

Finally, I leave you with one of Berk’s little games.  Let me quiz your market knowledge here.  I am posting a chart with 2 lines on it.  No indicators.  Dates (so you know it is current and pertinent), but no price cause that doesn’t matter.  IMHO your views on this example should indicate your market bias.  I really would like for you guys to try to find the ticker, and let me know your thoughts.  I will post the answers (that I believe) and the reasons why either later tonight or over the weekend.

Ticker? Pattern? Direction? Your market bias?

Added in this chart to help illustrate the two potential points I could make.  This is the mystery ticker with a $SPX overlay, and a 10 and 50 day correlation to the $SPX on the bottom.  Take a gander and see if you concur.

More food for thought.

Answer:  Observingquietly and Zigzag know my ticker.  $KRX, the regional bank index (with KRE being the tracking ETF).  What I am seeing on the chart above and below is that the 50day correlation (red line) seems to foretell a little bit of a market decline.  Everytime it dips belove the zero line, we get a little decline.  Whether this represents a detachment to reality, or is merely conincidence remains to be seen, as there is not a ton of data to make a firm conclusion.  I can see $KRX continuing to coil in between the two trendlines (I think it is a triangle) while the market performs a little dip and rip.  The correlation running out as $KRX breaks upwards out of the triangle and $SPX begins to take a nose dive.  Sounds beautiful doesn’t it.  Just another thing to keep an eye on.

$KRX correlation with all data (prophet)

Program trading wrap-up:

Geronimo – 4 trades; +10 points 🙂

Not sure about the others…  I will get them out if I can.

Enjoy your weekend.  Do your homework (my chart) and I will be in to check on y’all later on.

Berkster out…