Stock Market Technical Analysis Blog
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In the market today we had a big gap up at the open and all seemed well until Boehner came out in the late morning and stated he would make sure the Republicans approved bombing Syria. The market didn't like the increased likeliness of bombing Syria and the market sold thru the early afternoon but got back a good chunk of it in the last hour to close modestly positive.
Looking at the lower chart above, we can see the VIX spiked above the 432 line on the Boehner comments but retreated to the safety of the lower side of the line in the afternoon, effectively retesting the 432 as resistance for the second consecutive day.
Looking at the upper chart, we had airspace between the orange and brown lines which is the safety margin that needs to be maintained in this stressful market environment for a few days before the lift begins. Unfortunately, with the surprise comments on Syria, the strong pullback in the afternoon actually tightened the orange line against the brown which is not desirable until the 3-5 days of running parallel with some airspace between them. Now, however, the pressure is on the boys to make sure tomorrow is not a down day, which would not have been a problem for it to be so, if we had held all of today's gains. The two lines need to start to get airspace between them over the next few days. If they don't, the S&P could easily find itself in jeopardy of a news triggered sudden down cross which would stop the laborious construction of the lift setup and turn the market upside-down.
Trade well my friends
Alan
