Monday, July 23, 2007

Qs stall; VIX in overbought range


The Qs never got far off the PP pivot on Monday. The TRIT flatlined between PP and S1 and both the TICK and the NYAD remained downslope all day. Yes, the Dow was up 92.34 but that was driven by 4 stocks: MRK, IBM, PG and XOM. For a Monday, this was not a strong day and based on the charts, I think the the Qs are going down to support at the 49.70 level before resuming any uptrend. Although the VIX is banging agaist the upper band and the spinning top suggests a reversal (down), I think we'll see a solid break of the band before that event. This could happen quickly, but one day pattern reversals favor Wednesday or Thursday as a best candidates. I'm holding back on new premium decay plays until I find some attractive setups.

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