Thursday, October 04, 2007

Playing the waiting game

The Qs closed up .02 today after a narrow range, low volume day. The 7/3 DSMAs are about to cross over, having broken off the upper Keltner channel and although the RSI is giving no clue, the overbought MACD is turning down and suggests further weakness to come. Our October weekly Qs performance study projects next week as likely weak, which aligns with the Trader's Almanac 20 year statistics. That being said, earnings season is beginning and the usual gamut of cleverly timed govt. reports can take the markets either way, so I'm expecting volatility to increase and just playing delta neutral tactics for now.
The VIX performed strangely today. . . trending down along with the NYAD and the TICK from 10:45 to 11:45 pst. That's not typical. Watching volatility action on the pivot lines was like watching a worm crawl a string line. The NYAD went limp about 11:45 and the TICK had one of the narrowest ranges seen in recent memory, reflecting traders unwillingness to make any large commitments.

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