Monday, March 29, 2010

Some Rotator Divergences

The MLR Rotator still has the Qs in slot #1 while the top 5 slots continue to be closely grouped. GLD was the big mover on Friday, but note that in the 5 Day column (relative 5 day SPX performance) GLD is still in negative territory. Given the somewhat precarious technical position of the majors, I'm implementing the 1/3 ATR8 stop that I mentioned last week. The current ATR8 on the Qs is .54, so our stop is $.18. This may seem a rather tight stop, but for the time being I'm in the capital preservation mode. The market could slide either way at this juncture and the end of month rebalance trades may, all by themselves, goose the markets higher.
On an intraday basis it's been noteworthy that the NYAD has rarely fallen below 1 in the past two weeks. Shown below is the 30 minute bar chart of the NYAD for the past 12 days. While there were 2 instances of the NYAD running in the mid .5 range most of the day, we have not seen the .3 levels that normally presage the NYAD dips to the low teens, which are characteristic of reversals. Bottom line . . there has solid accumulation during this period and while it may have been of the low volume variety most of the time, shorts have had a very hard time finding any traction.

A preliminary glance at the Currency Rotator shows the UUP failed right at the upper channel band, while the Euro preformed an abrupt turnaround. This may have been one of those situations where the uber hype had primed the market for further UUP gains and the smart money decided to play a little switcheroo and pick up some easy cash. Whether it will stick or not remains to be seen. Keeping with the reversal theme the Pound also picked up some steam, effectively reversing Thursday's rank ordering.

Asute readers may have noticed I've made a few changes to the blog layout to expedite loading time and avoid the occasional browser crashes that a few readers have complained about associated with the multiple FSC real time Qs and GE charts. Those charts have been migrated to a another site, which actually contains even more BZB preformatted charts designed to facilliate daytrading the Qs VIXEN, the GE VIXEN and the DIG/FAS pair. This is a work in progess and may eventually be a stand alone product with daily updates of the VIX PDQ Dashboard and pair trading ideas.

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