Yawn at market

Here’s the dangerous setup for bulls:

1) Declining Vix = complacency

2) High volume selloffs + …

3) … low volume rebounds (Sisyphean Rallies)

I suggest exiting some swing trades, both long and short and ignore short-term technicals. As we head into quadruple witching Friday, there should be some nonsense action going on as volume picks up in exiting positions before the end of this horrible year. There are just too many bottom callers and too many “next-leg-down” callers heading into the final days of the year. The market is telling you something folks… we have some HORRIBLE news these past two Friday’s, and the market recovered on both of them…. odd thing, people are still thinking this is a huge bullish signal. Friday’s recovery from the auto-bailout news was weaker than last weak.

If you are a new trader, please turn off your TV. In fact, turn off your computer and just wait for a proper breakdown or breakout. The highest probability trades out there will probably be earnings plays, perhaps a stranggle on the conference call. Other than that, let’s keep them light. If you want to play, there a few opportunities, long or short… I am keeping a list of shorts that are rallying on low volume (which I will begin shorting as the Vix hits the 40s), while buying longs that move up on high volume, but buying the pullback. As you can see, I am taking a “let the trade come to you” approach.

ALoHa!

Gio, theHawaiiTrader

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