Monday, July 19, 2010

On Edge

You don't need a weatherman to tell which way the wind blows . . Bob Dylan said that. Technicals don't look good . . I said that. In a departure from my usual 2 day bar sorts which tend to buffer short term momentum the above sort of Friday's action is straight up daily bars. Keep in mind that the VIX marches to a different drummer than stocks and ETFs because it's a statistical value, not a tradeable equity.
Items of note on the sort include:
1. Volume surges in TLT & SH, while GLD has dropped to almost 50% normal volume.
2. Lowest short interest ratio continues to reside in SH, which some believe is bullish.
3. The majors are red in all 3 lead categories. (I'm discounting SPY 5 day value of .01)
4. And, if you want to get nervous, take a gander at the weekly and monthly charts of the majors. They all look poised to plummet off the chart. Now, I don't want to be discounted as one of the doom and gloom prophets . . because starting from my current flat position I just follow the market lead up or down . . I've no preset bias either way.
Unfortunately there's lots of folks with big bucks tucked away in their IRAs in the form of mutual funds (I have no idea why anyone would still own a mutual fund with all the great ETFs available that can be opened or closed in a few seconds without waiting for the end of day to execute). Those monies will be at risk if we do get a real drop and, if nothing else, maybe picking up some SDS or SH to at least get neutral until the danger has passed and we get back to an uptrend should be considered. Better safe than sorry . . you know me. . . always trying to look out for my vast readership and loyal subscribers.
Finally, a little item that may get your attention. As part of my Telechart Gold subscription I receive the nightly Worden Report which is sometimes dead on and other times wildly off the mark, and I make no warranty as to the reliability or tradability of the attached report. Worden Bros. have been at this for something like 30 years (I've had a subscription for 24 years) and they see the markets through their own technical lens and forecast accordingly. A robust and versatile suite of technical tools at a rock bottom price IMHO. Of course this report is copyrighted material but if you go to you can get a free 30 day subscription, so I'll just assume all my readers will do that and keep me out any legal trouble.

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