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Volatility looks to make a comeback in 2010, after a nine month doze. As you can see, we are approaching a significant support area in the [[VIX]] :
We’ve already come very close to the support line in the latter part of December, but we may revisit one more time before we break out of the triangle. I think once we bounce out, however, we go to at least the 200-day moving average, which should be around $26, at that point. If you look at the long term chart, you can see that even in bull cycles, the 200-day EMA has been a touch-point for the $VIX.
Now you can also see on the chart that my “box” allows for a break down from that level as well, so we must be on guard for the scenario as well. Never get wed to a position, etc…
My second bullish chart is in our favored sovereign currency. [[UUP]] , our proxy, has broken out of the congestion zone, and it’s next two stops are its 34-week EMA at $23.25 , and then the 61.8% fibonacci target, at $23.83.
As you can see we’ve come back fast from a long term downturn here, and I wouldn’t be surprised if we bounce off this congestion line this week, in a final flurry of hope. I expect that congestion line, however (at about $22.90), should hold for this cycle, and we will have further strengthening in the dollar.
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with you on both
Fucking absurd.
It was the only pick I could find of Frazier and Forman together.
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The calm before the storm.
PMs are going to get hurt if the $ makes another up-move. Back to triple digits?
While I expect further pullback, I don’t see it breaking $1K.
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http://screencast.com/t/ZTQ4ZTQyNzYt long FCX looking for the squeeze out of 84.50 to negate H&S dandruff pattern
Nice call, but you need it over $87.50 to get the real break out.
Not on this cycle, but soon, I think.
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Belated Happy New Year, Jake. Hope you’re feeling better.
Thanks, mon. Just today starting to come out of it. Still coughing like a Dickensian orphan with pleurisy, but at least the head feels a lot better.
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Had that once … nasty stuff (like a bowling ball rolling across the alley of a lung)
I’m fighting bronchitis with an array of meds myself …. head better and broncz starting to open today, thank god.
big cap tech weak today, so far your 2010 predictions doing well jake, following you this year, best…allan
I just wish I was able to buy them at the target prices, lol. Thanks, Allan*.
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* Is this spelling Welsh?
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not sure of my name origins :)…parents lithuanian/polish…do you like oil short here? SCO perhaps? yeah i hear you on your commodities picks, not the pullback we were hoping for, hopefully soon 🙂
Just a shot in the dark… the only other “Allan” I know who spelled it that way (two ells, two a’s) was a Welsh PhD-candidate biologist with whom I used to play rugby up at school.
Big mother.
I really think oil is ridiculously overbot (like stocks), but we’ve reached a seasonal period that may let it down a bit easier. I’d wait for a break and short the rebound.
I liked natty’s moves today. NGAS was up 10%.
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You picking up any MON here Jake?
Not at the moment. But I never sold any, either so I’m okay at the moment. I did hedge with short 85 calls, however, which I may want to rethink if we get a continuation…
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Thanks Jake, is there a point in which you’re going to take your hedges off or are you still relatively confident of a pullback?
Well, if we keep rocketing up like this, I’ll take them off, and likely roll them forward. Also, if the dollar breaks down from the levels I’ve described above, then I’ll know the devaluation game is on again.
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Thanks Jake, hope you’re feeling better.
Appreciate it.
Not sure if you noticed, but the UUP dropped briefly to 22.84 (after opening at 22.87) only to stick all day at $22.90 and close two cents higher.
Curiouser and curiouser.
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FYI for tomorrow:
PowerShares DB USD Bull ETF: DB Commodity Services re-commences issuance of shares of the PowerShares DB US Dollar Index Bullish Fund (UUP) 22.92 -0.16 : Co announced that the registration statement it filed on December 8, 2009 to register 240,000,000 additional shares of the PowerShares DB US Dollar Index Bullish Fund (UUP) was declared effective by the US Securities and Exchange Commission. UUP will re-commence the issuance of shares on Tuesday, January 5, 2010.
Not sure that will have much of an effect, E8. I’s an ETF, not a company, so typical dilution concerns should not really have an effect, as every new share is backed by the same “formula” as the old.
All this shows is that there is some increase in demand for a dollar proxy ETF. While I’d like to make more of that than it is, I think it’s more a reflection of popularity of ETF’s than anything else.
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Finally, someone who thinks that volatility will be back!! I’m a momo trader, but the VIX can’t stay that low that long… Hope you had a good 2009, will be visiting iBC more often as in the past (New Year’s Resolution).
Are you in college yet? You are one precocious kid.
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Thanks Jake! Got accepted to Bentley University (Waltham, MA) where I’ll be majoring in Finance and minoring in Health & Industry starting Fall 2010 – stoked out of my mind.
Waltham? I think we may have played them in rugby, or maybe lax once or twice. Nice area! Got a couple of friends from the Chestnut Hill/Newton/Weston area.
Silver spoon types, for the most part. But keep your eyes open… though I was too stubborn to take my Dad’s advice, I’ll leave it with you:
It’s just as easy to marry a rich girl as it is a poor one…
(Not really true, btw. The term “high maintenance” was not coined by BMW owners)
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Great news for Jake and the Gints!
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Allelujah!
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You guys HAD a defensive coordinator??!
Jake, have you ever seen a team like the 09 Giants….Start 5-0 and the way they layed down to close the year?
The swagger they came into Arrowhead with and the way they finished…. I don’t know if they would beat the Chiefs yesterday.
’09 Broncos?
Yeah, Broncs fell apart too.. they were 6-0, as recall.
But I saw the stat on Sunday… it’s ugly…. very, very few teams miss the playoffs after going 5-0. That’s just a sign of bad coaching, and heads SHOULD roll.
Coughlin’s getting old, but his Superbowl win two years ago renders him immune. Sheridan (the DC) was a no-brainer, but I’d love to see them get rid of the Walrus too (Gilbride, OC). He thinks he’s OC’ing a San Diego team, I think.
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Wasn’t COORDINATING mooch, was ‘EE??
(/cockney accent)
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Jake – can you explain if this portends bearish equity moves in the near future? I don’t have any experience with these names, nor their import. Thx.
http://seekingalpha.com/article/180834-phk-carnage-continues-who-smells-smoke?source=yahoo
http://market-ticker.denninger.net/archives/1815-Uhhhhh…-Ok,-Keep-Buying-Fools.html
Found this on the Newsbot 3K … May or may not be relevant :
In Japan… “as the population gets older, there will be less domestic demand for bonds. Zuckerman notes, “already the biggest pension fund in Japan, which is the largest in the world, has said it may be a net seller as opposed to a buyer.” Good news for those betting against Japan (Kyle Bass and David Einhorn) but potentially bad news for world markets as the effects ripple across the global debt markets.”
http://www.zerohedge.com/article/hot-hedge-fund-trades-2010?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+(zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero)
What, you mean after 20 years of jamming 1% (and lower) bonds down the throats of their pensioners, the Tick of Japan is finally full up?
The one thing Japan had going for them is an extremely compliant populace when it came to Gov’t financial matters. The major problem they have with that compliant populace is that it’s dwindling.
Listen up gentlemen (and ladies) — Demographics is destiny. This is exactly why you should always take the time to punch end-of-the-world, one-child-policy Malthusians directly in he face, in a mustache-removing fashion.
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Generally I think Karl is a dork, but I’ve been talking about TBT here because of increasing demand returns (ie, higher yields) in the Treasury area.
If people are selling ten year bonds, then you can be pretty sure that other yield instruments will suffer as well. Why High Yield? It’s the riskiest — near equity — in the bond markets. And the bond markets are much much bigger than the Equity markets, hence “little brother’s” last holdout capacity.
Generally, little brother will follow, however.
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