If you have a strong bias, short or long, then I’m pretty sure after today’s tape you’re adding to your frustration. I mentioned last week that the market was at a pivotal point that would be followed with much misdirection and volatility. In my poker analogy, I was trying to stress how you don’t want to bet heavy either side when there’s “not enough cards on the table.” You see, right now the market is fooling you. It’s lying to you. How do I know? Look at the Vix in the past 12-days… it looks quite similar to a lie-detector, and it’s going hAyWiRe!
Charts are lying in the past 7 days…
… observing the movement in the SPX and also from a technical perspective, the market really did lie to us. If you used “breakouts” and “breakdowns” when volatility was ruling this tape, then chances are you got whipsawed…
… this proves my theory going into the week before inaguration, that “You Just Don’t Know,” and also shows via my poker analogy, that you don’t want to carry a heavy bias in either direction (even though according to the long term charts, being bearish is the winning side). The game has changed a little, but I think we will get a direction soon. The rules of this current game was to daytrade the volatility (I use the $VIX and any reversals in it) and find heavy imbalance in the market intraday.
Notice the wedge pattern developing on the big 3 indexes… its a heavy battle with the bulls and bears here, so keep swing positions light! As I’ve said before, over and over again, wait for more cards to be shown. No need to make big bets here… we’ll have ample time to make a move; it’s not even February yet. For now, I’m starting to lean on the bullish side. It’s more of an intuition, kind of like Ragin’s post so if we get a dip, I may enter some swing longs. However, I wouldn’t be surprised if the market were lying to me too.
ALoHa!
-gio-
Just goes to show that ‘The Fly’ is once again the smartest of all – his semi-retirement/egregious-cash-position ‘just happened’ to come at the perfect time!
Thanks for the update Gio. I’m stayin on the beach until the chop clears. There still a lot of sets to come from this storm. Thanks for the response about TBT on my new Twitter account. I should have signed up months ago. This riptide in the market has pulled many of us into the dreaded sea of daytrading; you either drown, swim aside or catch the next wave!
-Eddie/FireTrader
Well that explains why my QQQQ and DOG systems both triggered buy signals this week.
Thanks.
Gold is picking up today. what the?
Thanks for the article on the VIX – I had been neglecting this indicator and after some study last night have added it back to the trading arsenal
I nailed the reversal on today’s market on stockTwits. Shorted FAZ at Dow -190. applying my “the market is lying to you, early in the morning” strategy.
… more lies to come, in the final hour of trading!
Outstanding and hilarious, in a very dark way.
great post..
Another thing about the VIX. The FEB OTM strikes broke down. None of them paid a profit.
When the VIX doesn’t know what it wants to do, that’s what happens to the strikes. The situation doesn’t ever last very long. So, hopefully the VIX strikes get to working again, soon.
I’m with you Geo,long TNA at 23.60 for a swing.
NEM decided to retest it’s double top 44.7.
Now that, that is out of the way, I can get back to the business of shorting gold stocks.
Hi Gio,
Do you think LUV has found support @ 8? Just curious.
yikes, i didn’t realize how low LUV dropped on Friday. you can get this under 8 next week.