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Monday, December 1, 2014

Monday morning chart observations


Let's look at some charts to see what's going on:




High yield is crashing again. Apparently some people are concerned about the fraction of high-yield corporate debt that's being carried by small American oil companies.

This sort of roll-over has brought quick US equity market pukes before, so I guess it's something for me to watch.




I'd suspect that this pop in $VIX today has come from people buying real downside protection options for e.g. oil companies. If so, the question is whether this drives the index-watching bots to puke the US markets. There's an algorithm to uphold, y'know.

Will $VIX pop to 20-30 again? If so, shorting $VIX once more would be fun.

Then again, the market thinks we're supposed to have a Santa Claus Rally! The American consumer is supposed to have a lot of extra money in his pocket because of collapsing gasoline prices!

If that meme is prevalent in the market right now, maybe we end up with a good long downward move in the market for the next few weeks as people's dreams come crashing down? How much has Wall Street Whitey bet on a year-end rally?



US dollar has still not broken upward, nor has it broken downward. This morning's candle is surprisingly weak.

I would think that such a major crash in oil should make USD skyrocket. So maybe this is a clue to us that everyone's already as long USD as they can get? Still no decision either way, we've got to keep watching.

And the miners?


Sorry buddy, but despite all the green you see on your screen, GDX is still below it's short governing EMA, so it's not something I'd buy right at this moment. Sorry, I maintain discipline.



And yet gold recovered from last night's wallop and has made it above its own EMA.

In fact:


Gold ex-USD has popped above its EMA making Friday's move look like a fakeout, and it's now close to that tantalizing 4.75 breakout line. I.e. if GLD:UDN goes up from here even just a bit, gold will have broken out ex-USD. To the upside.

That might cause a lot of people to passionately reconsider their "oil is gold" thinking.

So that's where I'm going to be taking my cues.

Meanwhile:


When I grabbed this chart, silver still sucked: but I just checked and now it's moved up through its EMA(10). Weeeeird.


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