Manic Markets

The market continues to churn in a wide range, but there are some signs of change.

Hedged trading has begun under performing the underlying index, signaling short term bullishness. Volatility is falling, but remains high, so stay cautious.

Tuesdays selling may be a capitulation point considering the ratio of down/up volume.

Up/down volume on Wednesday is in an uptrend, so look for markup and accumulation.

The NAMO has stopped falling, and though it remains below 0, it could turn bullish fast.

TBT has showed impressive strength in the last few days, even during the sell off. This is my favorite long candidate, target ~50.

The weakness in the VIX is encouraging, but one day does not make a trend. I'm still very cautions, and more liable to sell rips than buy dips. Nevertheless, if Treasuries continue to fall, I will begin to get long.

Wordle

A Twitter cloud via Wordle

Lol currently browsing TBT.

Today's Twitterd Tickers $CTDC $SPY $SRS $TBT $USO

Here are the tickers making noise on StockTwits

CTDC is showing a basing pattern, and a high volume Bollinger break in an uptrend. This looks like something worth buying on dips, but it is currently over extended.

The SPY is showing encouraging stability and remains in an uptrend.

If the shit hits the fan, SRS will be a good place to get involved, just look at that volume! Real estate has not kept pace with the recent rally and may have more downside to come. This is a very speculative long, beware.

TBT continues to rip upwards on huge volume. This is proving to be a great, low volatility trade in a fundamentally sound direction. Great risk/reward in this one. I'm buying the dips, rips and whatever else the tape can give me.

Oil continues to make an impressive rebound, and though we may have a pullback, I suspect this is the real bottom. Clearly, it is too early to say with certainty, but I'm buying DXO intraday and DBC for longer term positions. The risk reward has been PHENOMENAL.

Today's action was great, even if the indexes ended up a tad red. Treasuries are still weakening which is giving a boost to oil and emerging markets. There is also excellent action in fixed income, but I'll provide those charts in the next post.

State Of The Market

Even with today's negative action, my indicator was positive.

We're at the levels that preceded the last down leg. Will it be different this time?

Short treasuries and short gold is breaking down, so people are still shunning risk.

The yield on the 30 year looks ready to make new lows.

I've been too busy to trade the last few sessions as I focus on other income streams. The action still looks choppy, but buying the dip is not crazy. Risk management remains critical in this volatile environment, but if you've made it this far, you know that already.

6 Months Later

A tip of the hat to people who can actually blog for more than a month... I certainly couldn't. Now that we're plumbing the abyss of financial Armageddon, it seems prudent to comment on these so-called historical times.

Does anyone remember Hank Paulson's "strong dollar policy"? People (including myself) scoffed at ol' Hankie every time he uttered those words. I wonder if any of those people still think its funny.

Since late July, the USD has been one of the best performing assets since the massive unwinding began. The "worthless greenback" is proving its value in this crisis, and plenty of the fuckers who stubbornly said it was going to zero are eating their hats as their poorly managed accounts get liquidated.

Via fortune and tact, I'm emerging from the wreckage unscathed. How?

Technical analysis.

Over the last 3 weeks, the major averages NEVER closed above their 5 day moving averages... NEVER. Since early September, the Nasdaq has been falling below a declining 50 & 200 day moving average. These are not conditions for investors as the biggest players are clearly selling.

Those who say this is the product of irrational decision making have never faced a margin call. Finance is a feedback loop, and the system is experiencing an auto catalytic flight to low yield currencies. Selling will beget more selling so long as there are leveraged participants on the wrong side of the trend facing forced redemption and margin calls.

For a weather vane in this storm, watch TBT, ProShares 20 year treasury double inverse ETF. Expect this to rise once people stop shitting themselves and notice the high yields offered by companies with low debt.