Slim Pickings

We don’t have much to work with right now as my charting universe separates into two groups right now. The first one is on a burn (e.g. Euro pairs and various commodities) and the second is parked in sideways mode (e.g. precious metals and equities). Can’t squeeze blood from a stone, as they say…

From a risk perspective things are getting pretty interesting here however, especially given that we’re now heading into the seasonal EOY earning season. Consider for a moment the massive change in the VIX over the past two weeks. We are now approaching the baseline which is currently scraping the 13 mark. If it is broken then a drop to 11 may be in the cards. But a correction after a final ramp higher (and a touch of the 13 mark on the VIX) would be an excellent pre-Christmas selling opportunity.

The VIX:VXV ratio would then most likely have touched the 1.2 mark or higher. Until that happens however I would be very cautious about selling the current advance. Don’t let the sideways range on the index futures fool you as we probably have a final push ahead of us. Most preferably we’d see new all time highs on the SPX and Nasdaq as well.

Our natgas campaign finds itself in the second camp as it hasn’t budged an inch. I’m still long since my second entry (i.e. green line) and don’t see any reason to exit or make adjustments. However natgas is rolling into January and you are well advised to take care of that today if you haven’t already. Of course if you’re not in this one yet then grab yourself a January contract and you should be good for the next 30 days.

Gold also hasn’t moved and apparently is considering existential issues after having read Nietzsche or Kant. It does have to hold here or we’ll probably see it slide all the way to 1060 or below.

Crude is an entry here, the closer you get it near 45 the better. My stop will be quite a ways below 44.5 where we incidentally enjoy a daily Net-Line Buy Line. This is a great opportunity for Putin & Co. to burn the shorts. But whether they’ll take it is another question.

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