Thursday, October 28, 2010

Zombie Tape

Tomorrow is the 81st anniversary of Black Tuesday, 1929. As we head into the last day of the trading week, this tape feels like a walking zombie stumbling around on POMO anticipatory trades, getting a little spooked here and there by news on AAPL's margins to HAL's legal problems to currency moves as other countries set out to save their own economies. This is a take no prisoners tape when you see things like the rare earth stocks beaten to a pulp today, so please be careful out there long or short. Also try to remember that correlations might be very skewed as possible rotation takes place. What worked yesterday might not work tomorrow, and that includes the currency and PM correlations.

There is really nothing much left to be said about these charts that David hasn't outlined on his post yesterday or most of us have been chatting about all week long, but there were two charts that showed more signs of possible weakness today that I'll post below. Keep a close eye on the leader darlings tomorrow. NFLX was flat, PCLN was slightly down, FSLR did a nice swan dive on earnings, GOOG was sideways, AAPL saved itself for now at the 20 EMA and so forth. The dollar did pull back some today, but once it found gap support it sat there like a good little dog on the curb and AH volume was not as high as previous days this week, but was still way above average at 30K shares traded. As I'm typing this, the Nikkei is down 145 points so far. We'll see how things look once Europe opens in the morning.

I know that HP posted the bull/bear sentiment info early Thursday, but in case you missed it, here are some charts that ought to blow your little trading minds. And if that doesn't do it, take a look at the NASDAQ Sentiment indicator here.

The first chart shows the VIX with the 3-line break that painted the first white brick as of today’s price action. The $USD chart showed us a white brick several days ago if you remember me posting that chart. Keep in mind this charting method removes the time element, and if you’d like to read up briefly about it, click here.

vix_3_line nasi_10_28

See you tomorrow for another edition of the Vampire Squid Diaries

I ain’t afraid of no Lloyd

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