Thursday, June 24, 2010

Small Victories

“Victory is won not in miles but in inches. Win a little now, hold your ground, and later, win a little more.” - Louis L'Amour

Watching the U.S. Soccer Team at the World Cup yesterday reminded me of how much preparation happens before one small victory. Anyone who has traded for any amount of time know it’s the small trades that will see you through, rather than always looking for the “big hit.” Let them add up and they equal a “bit hit.” Imagine the work these players do, the injuries they endure and the defeat they’ve swallowed just to kick that ball into the goal.. even once! That is the business of trading in a nutshell.

Inna mentioned, and I’m sure many of you noticed, the normal correlations were extremely wonky today. What this means is not clear, but should be monitored closely going forward. Is copper giving us an early sign of a bounce? Is the Yuan teaching the USD a lesson here? It’s hard to know imo, but let’s stay on guard going forward. DDT also asked me in private if we could be seeing a resurgence of a stock picker’s/sector market here? This was the case back in December/January for sure, so let’s keep an open mind to the possibilities to be had. As far as the volume issue is concerned, I pondered if the low volume on the sell-offs today has something to do with fund managers moving into long positions before Monday’s close, but it’s helpful to also remember this is the summer season, and volume is typically on the light side anyway, and in both directions.

We still have the RUT re-balance tomorrow, GDP, EOM, Quarterly end, quarterly options expiration, G-20, the Financial Reform Sham.. and who knows how many other things on the table at this point. I trade the charts, but remain well aware events like those mentioned are “used” to move the tape. Time for some charts, and DDT will add his in later on if he has any energy left and takes mercy on us tonight. :-)

spy_daily_eod_6_24 spy_monthly_eod_6_24
qs_daily_eod_6_24 vxx_eod_6_24

Instead of my usual music, I came across this the other day and thought you’d all enjoy not only the fantastic music, but the fractals. Enjoy!







    ~~~Osikani here~~~




Is the bear rampaging, or is it just another trap?


Today's market update. This time we use both the SPX and the SPY.

We are now in full bear mode.

First the Day Tracking Osi Analysis. The legend is on the chart, but everything says "bear".


Next is the VIX cross. It too just indicated short. The picture is totally messed up by the Casper VIX print. I guess I have to rewrite the code to take care of ignoring outliers. If I do rewrite it, be assured it will still be free. I like the feeling of having given back for all that I have learned from the blog, and in any case, I still do not believe that general knowledge of a method makes it stop working. I find it hard to see how the market makers can game the VIX, in any case. It is just too big. In any case, as I posted earlier in the day, the cross had already happened. We were just waiting for EOD, to be sure that the cross remained.


Next comes a look at the Guppy Multiple Moving Average System.

The picture speaks for itself. The long term moving averages have certainly held as resistance by all descriptions:

1. They remained roughly parallel in spacing.

2. They are pointing down.

The short term moving averages bunched up, as happens when traders fade a strong move, and have resumed their downward trajectory.


Next comes the DeMark (+ extras) lookee see.

Again, the picture tells the story.



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