Tactical musings, technical timing indicators and risk management strategies
Friday, March 26, 2010
UUP Tops Channel
UUP surged again today, completing a technical run that has taken it from 1 standard deviation below the LR30 channel to the upper channel band in only 7 days, eerily similar to the run UUP made Jan14-21 earlier this year. That pop was followed by an extended bull run that lasted another 45 days. The jumping off point this time is considerable higher than January, but at 24.13 the dollar is still well below the longer term high of 26.76 a year ago.
That was a dramatic reversal yesterday. From over 100 points in the green midday to a red finish for SPY, IWM and the Qs, volume accelerated steadily into the close. The VIXEN picked the turnaround at 10:30 am pst, almost dead on the first bar reversal and stayed with the trade right into the close. The VIX/VXN and QQV volatility trackers were all cruising along happily in the red until the turnaround woke them up. As an indication of the closing selling pressure. all three Vs were up 2.5% 15 minutes pre-close. At the close they were all up at or near 5%. I've turned the 36 cell Strategy Matrix upside down, so while the SPY is reading +13, -23, the VIX is reading +30, -6. This 2 sided use of the Strategy Matrix is a new idea and I'll be following the results closely to see if the beta differential between the SPY (.99) and the VIX (-3.26) is reflected in the Strategy Matrix signals.