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Constellation 1976
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Discretionary Trader Speculating in FX and Commodity Futures.
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Constellation 1976
  • VIX and S&P consolidate for a possible test of 1000 mark 1 comment
    Jun 20, 2009 12:06 PM | about stocks: VXX, SPY

    While the trend channels i have drawn are not very precise they give a relative perspective on the positive correlation between the trending move in US stocks and the decline in Volatility.

     
    The more important point I try to study in those charts is that both stockas and Volatility are intoa horizontal range that rules for the time being. As I pointed out last week S&P has a solid Support around 875-885 and Resistance is defined by the recent consolidation below the 960 high. There is a pending Golden Cross of the 50 & 200-Day MAs which will bring major media attention and will force retail accounts and mutual funds to pour into stocks.
     

    The contrarian within whispers there will be a fireworks and some euphoria before the imminent break.However it is adviseable to wait and see if we can touch the 1000 mark on the wings of media and public sentiment shift from crisis fear into "the bad is already in the past" theme. 

    Stocks: VXX, SPY
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  • Bahaha
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    As much as I think that you’re right, the people who would be capable of appreciating your analysis already know about it. You’re among a few, because these people probably wouldn't want more people to know about it till it happens. The more the sheep are aware of what their meaning in life is the harder it is to be a shepherd.... Anyways I also believe that this will cause euphoria just as you stated, once we reach 1000 the sheep will believe that the recession has ended because of the media highlights sponsoring it. And that’s where the contrarian will come in, notice the head has been identified, short the market and give way to the left shoulder that has yet to start. The market needs a leader, needs volume, and needs euphoria before it begins to crash again. I can't wait till the people conclude that a V shape recovery is possible, and when the media will be sponsoring this dream, because that’s where real money is made, shorting the market and being the contrarian, or being that >1% of the investors that beat the market.
    20 Jun 2009, 09:22 PM Reply Like
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