Stock Market Technical Analysis Blog
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In the market today the action was dictated by the MACD oscillator, a somewhat over-smoothed interpretational tool for directional momentum. Generally, it pinpoints very few trades, tending to follow day to day movement. But like a squirrel that sooner or later finds a nut so did the MACD today. Looking at the two top charts above showing a day MACD on SPY and VIX we see that the SPY had a pushdown setup this morning and the VIX had a lift setup at the open this morning. We took a large short position at the open and closed it out after lunch for a nearly 1% gain in 4 hours. We decided not to hold the short position overnight as we feel it would be too easy for them to bounce the market tomorrow as can be seen in the bottom charts above. Plus we closed right at the critical 1995 level, the July peak where Team Yellen should be interested in at least a modest defense of this level.
Trade well my friends