Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, August 28, 2012

8/28/12 Wall Street Makes Good on May 29th Entry Markers

Stock Market Technical Analysis
Click to enlarge
Hello again traders, I've been on a three month summer hiatus from the blog.  On May 29th, the third blog down, I called out the flurry of longside entry markers put out by Wall Street as the entire financial media was hyping sell in May and go away.  Since then they have taken the Nasdaq 250 points higher during these three summer months as shown in the top chart where I drew a green line at the Wall Street longside entry markers. 
In the lower chart, the pattern of the VIX 5/10/20 moving averages is showing a basing setup implying the easy longside money has now passed and now is likely to get a little tougher for the bulls.  We can't ignore elections around the corner though, this period heading into elections can be volatile with lots of smack downs and also fierce short squeezes.  Technically though, the VIX has had three nice waves down since 5/29 and is seriously trying to base for an up move.  Also, the Nasdaq put up a fairly overextended shooting star last Tuesday which is giving fresh buyers pause until we see this developing VIX situation start to show resolve.