We continue to see pump jobs that get sold into. $INDU gave back 60pts into the close. Are we just climbing a wall of worry?
Breadth indicators like Zweig Breadth Thrust and $NYSI are not confirming this move as each has essentially stalled.
In the last few sessions, advancing stocks are just barely staying ahead of declining issues.
$VIX: Using my preferred method in the 60 minute time frame, which is using the 13 & 34 EMA’s, the 13EMA crossed up through the 34EMA today, and that would be a ‘buy’ signal. Meanwhile, XIV closed below its 50MA today after managing to close above it yesterday. So if $VIX is buy in the 60 minute time frame, and XIV has failed to stay above its 50MA for more than one day, then what is $SPX?
On this chart of $SPX I have drawn a rising channel. I don’t think it’s a legitimate channel but maybe it could morph into one. Clearly there’s a lot of indecision in the markets over the past few days and we continue to get those indecision doji’s. While it appears to me that the Big Boys are raising cash ahead of Friday’s big announcement out of Europe, maybe all this pumping and dumping we’re witnessing is something completely different. Today marks the third try and the third failure of the $SPX to close above the 200MA. Is there some kind of psycho voodoo going on with that MA? Beats me. It’s just a number not a barrier, or so they say.
The market appears to be held hostage ahead of Friday’s big announcement. Maybe that’s all this is, or maybe it’s something more sinister. All I can say is that I do not have a sell signal on any of the chart methods I follow. While the $VIX has given a ‘buy’ signal in the 60min time frame, the $SPX remains a hold per the same method.
Given what has happened over the past few sessions, I see no reason to unload longs, nor do I see any reason to add to existing positions or initiate any new positions. And I certainly see no evidence to support going in on the short side. Things are certain to become clearer in the next couple of days.