Yes, No, Maybe
Daytrader's delight
Another day, another dramatic reversal. I can’t shake the image of Don Jr. and Eric in a room full of prop traders front running the Truth Social posts.
Deal or no deal, equity futures are suggesting we finish the week on a bullish note. But we also should see the first trading in SpaceX and that could either send markets into overdrive or drag them down if it goes sour.
Meanwhile, we saw a little bit of repair in the volatility complex yesterday. The VIX Mix recouped 8 points yesterday but sits in bear territory with nothing bullish on the list of component indicators while 14 of 17 are bearish.
Our chart of the latest 12 months continues to be depressing as well with the 10-day moving average back down below 30%.
My friend David Cox (@DavidCoxRJ) has a simple indicator that he applies to the VIX as one way to spot potential reversals. It uses the Percent Price Oscillator set to 1,10,0 to spot spikes above a threshold and reversals from that level. Not necessarily a good trading signal (see March) but worth having somewhere in your arsenal if active trading is your thing. You can see this week at the far right. Reversion of the first spike was followed by an “echo” thrust into yesterday’s drop in spot VIX.
It could be that equities will base in here and move to retake new highs. The equal-weight S&P 500 (RSP) is already there. All eyes on how SpaceX trades today. Boom or bust? Let’s find out before plotting out the next move.
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