Friday, July 18, 2014

Pre-open US market checkup

Some charts before the open:

The S&P dove a bit yesterday, due to the whole imminent Third World War fear.

I actually watched a bit of Cramer last night. He was far behind the curve in terms of the news flow (I guess he gets all his news from Business Insider), and he also suggested it's a good idea to leave this for a few days before buying. I only present this because his opinions may be indicative of a fair number of US traders. Looking at the chart above, the S&P 500 closed yesterday in no-man's land and the next support is the SMA(50).

People have been crowing about how they want a correction and a buy opp; let's see how interested they are now that they've been given a buy opp today.

QQQ has been very strong, then dove to its Bollinger mean yesterday.

After looking at these two charts, and the MACDs, I suspect this could be one of those automatic TA-style triggers that promotes a "what the hell, let's just dump stuff" type sell-off like what we see happened in March. But there's no reason for it.

As well, MACD has been crossed over all through June, and yet QQQ was still going up. That's the problem with momentum indicators: they only show you short-term divergence from the longer-trend momentum.

R2K has been incredibly weak. I mean wow, that chart sucks. But now it's gone below -2SD, which has usually provided a bounce of at least a day or two. Then again, is newsflow supportive of that kind of move today?

And you know, with their fixation on the news of the moment, people might just be forgetting that sometime in the next week or two the USA is going to report an incredibly strong Q2 GDP number.

And like I said, $VIX printed a huge spike for the end of the day. 14.5 is over three standard deviations above the mean; then again, the bands have been tightened in the past month, so that doesn't mean as much as it used to.

Can we get a spike to 20 on the $VIX? I don't see why that should happen. It's just not sensible. Frankly, you see innocent civilians getting killed all over the world all the time, and the market never cares.

We'll see. Like I said, the market is being handed a buy opp, but they might not take it for a couple days.

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