Analysis

Doji Means Indecision

The markets formed a doji in week one of 2012. This is a sign of indecision and could be expected at the onset as traders and hedge funds begin to pick up trading again in the new year. That being said it is the long term investors which drive the long term trend of the markets. Aside from the intraday and a few small daily trends, we have really gone nowhere in the past year. We saw a few longs…

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Happy Holidays!

I leave you this week with a monthly chart of the VIX. Notice how we broke out of the wedge and now have pullback to retest it. Once the new year resumes we will be looking for a bounce off this level which would induce selling in the broader market. If we can break lower on the VIX then the markets should continue higher. Stay tuned for new things to come in 2012! Grab the RSS Feed to have the…

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Poised to Go Higher?

This is the first time in a long time we’ve seen increasing volume on the rally after a decline. While a lot of this volume could be do t government intervention, it’s still a positive sign technically for the markets. If you missed it, Reuters announced that “Major central banks agreed to make cheaper dollar loans for struggling European banks to prevent the euro-zone debt woes from turning into a full-blown credit crisis.” The stocks we”re trading haven’t changed, refer…

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Going Nowhere, and Fast!

The image above should tell the whole story. We’ve been going sideways for the past two months. Surprisingly it has made for some decent trading, but just wait until we begin trending again. Things will really start to pickup in the options markets because the moves in the individual underlying will trend more. In these conditions of sideways and high volatility it’s important to stick to your rules and WAIT for your setups and remain patient. As always, think risk…

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The U.S. is in Risk of a Systematic Collapse

Both the S&P500 and the EUR/USD are setting up for extremely large moves which should begin to unfold into the end of 2011. Two Scenarios for the Economy With an election year in 2012, one scenario is that the US markets skyrocket to new highs and the EUR/USD breaks down and retraces back to its lows. This would imply a strong dollar and strong US market. The second scenario is that the S&P500 sells off down to 2009 lows and…

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DeJa Vu of May 2010

We’ve seen it before. If you zoom out to a daily you’ll notice it looks very choppy, this is one of the most difficult conditions to trade, just look at May 2010. Stay patient, watch for confirming breakout in the VIX if we do make new lows. A rally to 1225 on the ES before selling off again is possible. SPY August 2011 compared to… SPY May 2010

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