VIX Getting Stubborn

Stock Market Technical Analysis Blog

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In the market today we had a bout of selling shown in the S&P in the upper chart.  The underlying problem being the VIX cat doesn't want to go back in the bag as shown in the lower chart.  The upper line of the S&P 20 year channel is starting to weigh heavy on the market.  

Trade well my friends

Alan

SPY Drops, AAPL Runs UP

Stock Market Technical Analysis Blog

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In the market today, the VIX cat jumped back out of the bag as can be seen in the upper chart causing the S&P and SPY to sink and some good rotation money to flow into AAPL as it had a big second day from its breakout of a 6-month downhill channel.  It will be interesting to see how determined they are to get the cat back into the bag considering we rang the bell on the 4-year S&P upper channel line last week.  Until we see any signs of waning in the continuous market push effort from those behind the curtain, most traders will probably expect any down day to be followed by a bounce day the next day.  It may not be that simple though, I am expecting a lot of confusion in the market as to where we go from here.

Trade well my friends

Alan

Are We There Yet?

Stock Market Technical Analysis Blog

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Taking a look at the S&P tonight we see that we have finally reached the upper line of the S&P's 20-year wide horizontal channel.  Historically, when we have reached the upper line twice previously, the market has traded in a choppy sideways motion for 6-9 months after first reaching the line, as can be seen in the individual monthly bars shown in the upper chart.  I wrote in detail on this in my Feb 8th blog of this year.  What happens from here is going to be a very dynamic and evolving situation because if they let the normal down cycle begin too soon, it would jeopardize the strength of the recent bottom in the housing market and in the economy in general.  The superior move as far as helping the economy would be to keep popping the S&P above the upper line to keep well heeled shorts afraid to short at the upper channel line.  This will be a very interesting year.

I'd like to draw attention to a notable event in AAPL on Friday on the lower chart above .  Looking closely at the chart we can see that it broke out of its 6-month down trend after multiple failed attempts during this time period.  Also, AAPL's breakout was from a nice ascending wedge formation.  Now that the position traders are not likely to be adding any more longs to the SPY, this actually puts AAPL in a more favorable situation to get some rotation out of the SPY into it.  We will have to watch and see on that.

Trade well my friends

Alan