Friday, September 21, 2007

Volatility falters

Qs followed through to the up side, contradicting yesterday's technical signals.
The VIX had a 7% day, continuing to hug the lower band while simultaneously maintaining a 15% gap below the converged 10 and 20 DSMAs.
I was frankly surprised and caught a bit off guard by today's strength, since the TICK readings and a flatline NYAD were not reflective of market activity. I faded the Qs and XRX just after the noon hour on reversing 8 minute bar parabolic signals, but closed out both trades at 2 pm with modest gains in both.
The strength today was moderate and narrow based, perhaps reflecting the multiple head fakes and feigns that transpire during expirations, and I continue to bide my time until the later part of next week before initiating larger scale trades (think more risk).

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