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Monday, July 6, 2009

07/06/2009 After Bell Quick Summary

SPY, UUP and VIX have carved out a reversal bar on the daily chart, it seems like that the market is ready to reverse its course here except for one thing: both VIX and SPX were up today. From the chart bellow we can see (dashed vertical lines) that 7 out of 8 recently when both VIX and SPX were up on the same day, the next day wasn’t very pleasant.



  1. Cobra,
    Do you put much importance on black VIX candles after a few days up? VIX also coming out of overbought on CCI RSI stochs etc.

    I went long around 330 in UPRO, looking for a bounce here.$VIX&p=60&yr=0&mn=2&dy=0&id=p01872450984&listNum=1&a=140941991

  2. Greenlander, I'm not sure if the market should rebound here even theoretically it should. I was mocked by the market so many times when some indicators say it should blah blah while the market simply didn't do so. From ISEE, I saw so many retailers are buying this dips...

  3. also, from week's data showed that small retail options traders (ROBO ratio) actually increased call buying last week despite the large dive early in the week. From my experience, these small traders tend to "buy the dips" early in a decline, and are usually wrong. Then later when things have come way down and they should be buying calls, they really load up on the puts.

    So i think that reinforces the data from the ISEE that Cobra is mentioning.

  4. Yes, Vix was up, but came down hard during that final push after the 200-dma proved to hold. I wonder if the intra-day nature of the move is also a tell.

  5. Well lets see what happens to this small retail options trader. I also picked up a small batch of SPY calls well in the money.

  6. I think they call this the slope of hope. Today was more hope that will evaporate this week. Anyone going long for more than a daytrade is nuts.

  7. Besides VIX vs Price divergence, there was also breadth and price divergence today as well.

  8. It more watch and see time, instead of mash the gas.

    The indu is the MOST beated down index, so for it to get the most love yesterday I would not put too much bull stock in it.

    NDX and especially the russell got hit yesterday, fairly hard too.

    next 3 trading days, i see downside

  9. sold my UPRO pre, and dumped my calls on open. I was looking for a gap up and didnt get it. NOt to say I dont think we can bounce, but the open didnt play out the set up.

    Now waiting on some sideways/ up movement to go short if possible.

  10. I've been thinking - if the equity futures program buying kicks in on a near regular basis around 3-4 PM ET, then isn't that a good window to short bonds?

    It used to be that those who watched FOMC buying/selling moves at 8:30 AM ET would get 80-85% of the 10 AM ET move right for bonds. Of course that tactic went out the window when TARP came around to obfuscate the data. But maybe there's a new signal here?



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