Page menu

Saturday, April 9, 2016

Market update week of April 9th 2016

Market update week of April 9th 2016

I'd like to get in the habit of providing weekly updates, and that starts today, Saturday April 9th, 2016, but more importantly I'd like to get new followers @3xtrades (our new trading platform) up to speed and on the same page. I'm also going to give you some tips on how best to use the information I provide. 
1. As most of you probably already know the $VIX is our most important indicator, as laid out in a previous blog entitled "Trading the $VIX". If you missed that, you're missing a lot, so be sure to check that out, and if you've already read it, read it again. Always watch the $VIX!

2. Watch the public charts area, because I can't watch everything all the time. Using the legend in the PC area, you can look at - for example - the current 2h DOW chart trading in a bullish channel (in blue), and recognize a bullish pullback when you see one. Friday's close. 

Here's the same thing on a daily candlestick chart on $NDX

Anyone claiming the trend has reversed is peddling fiction, and if the $VIX gaps down below 14.50 on Monday, we're going to see the shorts get squeezed again this week. 

3. For all the reasons mentioned in the previous blog, I like to do market update's on the fly, prior to the opening bell, and into the first hour of trading, as I'm reviewing, & updating the charts, with a fresh eye. If my updates are too distracting, you can always mute me at any time, and then un-mute after the open, and review my work after the opening bell. I plan to provide more tips, and guidelines in a future blog.

Getting back to the trade: Wednesday we killed it! Thursday we got our pullback, but it was like pulling teeth. Finally in the afternoon - we saw the $VIX break out above resistance (16), as the 15 min $SPX chart broke, but still no panic selling. I suspected that $VIX breakout was a head fake - heading into Friday - and sure enough the market rallied the next morning, as the $VIX fell back below 16. 
Friday, the market "behaved itself" - as I put it - while I took care of some administrative duties. We faded the rally at the open, and the market pulled back into the close. Oil rallied to the target. Gold and gold miners are a different story, and something we're watching closely. The divergence between gold and the miners is obscene! I'll have more to say on that in the next blog, as OPEX approaches.

So let's say, even if I was 90% right over the past 3 trading days, which is incredible; you still had to be a very nimble trader in order to make any money trading this choppy market. If you had your heart set on trading gold you probably made nothing. There are a lot of variables to contend with.  

As far as my broader market outlook goes; I remain short term bullish, and long term bearish. Intermediate term (next 3 months) is still unclear. I could post a lot of conflicting charts here, but I don't want to confuse folks... and to clarify any conflicting tweets; when I say "bullish", and throw a 15 minute chart out there, I'm talking about the next day, or 3, not the next few weeks/months.  
Keep your power dry, because markets remain choppy, and pivotal. Buy the dips, and sell the rips. This is far safer than waiting for me to call the absolute top. Picking tops is far more difficult than picking bottoms.  The big risk is to the downside, but as long as the $VIX (our fear gauge) remains contained - no fear (intraday). If you're nimble trade it, if not sit on the sidelines this week. 


No comments:

Post a Comment