Except, it came from the left. I was expecting it to come from the right. This morning the VIX-SPX correlation was screwed. I’ll chart that later.
Ragin is right… market can’t squeeze w/o BAC going up. It tried to, and when it did I actually got a good trade on FAS. However, when that reversed down and the VIX reversed up, it was time to bail.
Despite today’s drop in the market, and Yahoo Finance’s doom and gloom headlines, I still think it was a soft sell-off. It’s just so strange to see the VIX red and the big 3 SPX/DJI/NDX all trend down the entire day. Maybe it was because everyone expected a relief-rally today, and so the smart money dumped everything in the morning.
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Today’s action went almost exactly the opposite of what I was imagining it to go. I probably shouldn’t view charts while doing hand-stands.
(for those that don’t know the psychology behind “Thunder Thursday”, it’s a tape following a big news event that caused a big move in the market. With the thunder from the left, you can see how the bulls were very hesitant with all their rally attempts and took profits on the top of downward trendline. It’s similar to “flagging patterns”, except those bear flags do not usually go that high on the flag. The hesitation is caused by the end-of-week effect, in other words, traders can’t make up their mind if they want to hold a position into the weekend. Anyway, that’s the way I feel it.)
Good thoughts Gio. I interpreted it more ominously in that I find the behavior of the market very suspicious in that this area isn’t being bought more aggressively. Tomorrow is, in a business with no guarantees, guaranteed to be higher. Tough tape.
I don’t worry about the market anymore, as a trader, I worry about this http://tinyurl.com/ag8r5a
Waste of worrying, IMO. Last I checked, it only had 7 cosponsors.