Hey, I don't have much time this morning, but I wanted to make a couple observations on yesterday's market action, and point to an important chart.
1. The $VIX was sold as predicted, yet stocks aren't rallying. The easiest explanation for this is that Call Options are being bought in anticipation of the next rally.
2. Another reason... is that other sectors need to find a bottom, as the entire world doesn't revolve around the rigged $SPX, or $SPY.
3. But there's a 3rd reason... and that's because the panic is coming out of Europe, which I identified weeks ago, and I believe foreign hedge funds are not trading according to rigged $SPX targets, but rather the Wilshire 5000, as well as the $NYSE, and the $DAX, which continues to be a leading indicator for global markets.
This is why I'v decided I should share the $NYSE chart with you.
$NYSE (broader market index) - Pulling back to a key Fibonacci target. Also notice how the $NYSE wasn't even able to take out the June high, unlike the $SPX which was driven into extremely overbought territory, just in order that it could test the 200 day moving average, and be immediately dumped.
In order to get a better handle on how they are driving the $SPX, I'm giving you some homework, and that's to create an $SPX (holdings) folder, and chart the most heavily weighted stocks in the $SPX.
If you don't already have a good charting software program, I highly recommend stock charts stockcharts.com. Your first month is free, and if you enter my junk email address anthonyallyn@gmail.com at signup, and I'll also get 1 month free.
The Top (most heavily weighted) Stocks in the S&P 500 - provided by investopedia
Also Chart the $DAX, while you're at it, and you should have a good idea of where US markets are going!
Take Care, AA
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