Friday, January 18, 2008

Volume up, price down

Top chart is the Qs 5 minutes.
Lower double chart is VIX on top, NYAD on bottom: both 5 minute.
After a lot of interday gyration, the Qs basically went nowhere today. I should have sold that ridiculous pop in the first 30 minutes but, of course, I wasn't even near the computer so that one got away. Then the markets sold down hard, approaching S1 (DIA hit it; IWM blew through it), and the Qs bounced with a purely technical touch, recovered some ground and then traded in a narrow range for the remiander of he day. The NYAD shows the market action clearly; bias to the short side but no rush to the exits (probably because everyone had been anticipating a high volume capitulation today). The VIX shot off into the 29s and then retreated 2 full points into the close.
Tomorrow I'll look at the weekly 3 LRs studies for the Qs and the VIX. Although both have returned to approximate mean levels, that doesn't imply the correction is over. I'm still expecting a washout or one day reversal before getting long on any size.

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