Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, October 22, 2013

Messing With Sasquatch

Stock Market Technical Analysis Blog

click on image to enlarge

In the market today, Wall Street decided there was no need to pull the plug on the party just yet as they undertook a champagne celebration short squeeze based upon the fresh evidence of a worsening job market and QE possibly indefinitely.

Early on they decided it would be fun to mess with sasquatch, the monstrous short interest that shows up at the perfectly defined upper channel line.  Squeezing out of the channel in itself is fine as long as you remember that sasquatch can be really sneaky and likes to feed in the early morning hours (premarket session) when most people can't exit their positions.

Taking a look at the charts:
  • Chart 1:  I'm not chasing a short squeeze above an upper channel line
  • Chart 2:  60 min bar chart of the SPY showing the short term ascension channel
  • Chart 3:  Weekly candles - has an indecision candle
  • Chart 4:  Daily candles - also has an indecision candle again today
  • Chart 5:  60 min bar chart of the VIX showing its short term descending channel, note it continued its uptrend today despite the bad jobs report celebration in the market
  • Chart 6:  shows the SPY reached its upper channel line last Friday
  • Chart 7:  shows the VIX dropped to its lower channel line last Friday
  • Chart 8:  shows the SPY is extended away from its 100 day EMA line, about as far as it ever gets away from it and also shows the steadily decreasing volume as the rally went higher
  • Chart 9:  the two year chart of the S&P showing how it has bubbled out of its primary black line channel
  • Chart 10:  the 25 year chart of the S&P showing we still have another 2-4 months in the current 5 year supercycle

Trade well my friends