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Tuesday, March 2, 2010

Market Thought... up a notch

With the SP500 rising, and media complacency setting in, if I was cautious before, that cautiousness is only increasing. As the markets rise, my long positions seems to be getting reduced and my protection is becoming a market short.

Here are some patterns I am paying attention too:

Within the Vix, this hump in the Slow Stoch (highlighted within the box) suggests over the next couple of days we may see a spike.

The next is the SP500/Vix overlay chart that I consistently have up here. But this time, its flashing red.

The interesting aspect of this chart is how the Vix acts. It first uses the horizontal blue line as support, then the horizontal dotted red, then back to the blue line. But notice it tends to overshoot the horizontal blue line (captured w/in the circles).

I still believe there are plenty of bargains out there (i.e. IBM), but I also can not ignore the technicals.

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