Thursday, August 24, 2017
Post #6000! Note on $VIX and a kitty video
Since the start of the 2nd week of August, $VIX has refused to break back below its 20-day Bollinger mean.
That seems to be a fair bit bearish, and definitely contradicts an "all clear" message for the time being.
Also, though they're still well contangoed, VIX monthly futures have been rising for weeks. This makes me think people are buying downside puts to cover all coming months, not just an expected breakdown this week or next week or the coming manufactured September US debt crisis or something stupid coming out of Trump's mouth anytime soon - it's a broader level of concern. Not the kind of concern that makes everyone puke and go to cash, but the kind of concern that makes people cut longs, buy downside puts, and build cash in order to "buy the dip", maybe.
But the VIX futures seem to say the "dip" might be longer in the making than a day.
Though all this, the R2K and $TRAN charts still look bad, which makes the 2% pullback from alltime highs in SPY and QQQ look much worse than their charts would look in isolation. As it is, the negativity in R2K and $TRAN makes SPY and QQQ's hugging of the SMA(50) below their Bollinger means suggest a further breakdown, not an ongoing consolidation.
People were euphoric since Trump won his mandate. Now they're figuring out the euphoria was misplaced. Yes, the fundamental market valuation really depends on the US economy, and Trump can't do much to fuck that up; but the psychological market valuation depends on Republicans learning that they're fucking stupid idiots with no grasp of economics or policy whatsoever.
Expect that to take a while cos Republicans are fucking morons.
Anyway, in honour of this blog's six thousandth post, here's a video of a kitty cat sleeping in a tiny human bed: