Where are we going?

I hope you can see the two black trendlines I've drawn over this chart, showing a wedge I alluded to in the last post. There are two magenta trendlines at the end of the wedge. It seems reasonable we may end this rally near there... This, of course, is just an educated guess, don't take it as gospel....

(Click to enlarge)

More wildness...

I sold both short positions right after the open, the price targets on the $SPX were almost met,and as you can see, quite a bit of positive divergence on hourly. So a 'bird in the hand'...

So the market may have bottomed today and not on the 2nd or 3rd as I originally thought. With this much volatility, it's hard to know for sure, but when you're close to the profits you meant to make, grab them....

Note the conventional trendline below, the market really may have turned up today, and it looks like a wedge is maybe developing, the lines are not quite parallel:

Kinda wild day on the Street

$VIX went wildly down, then up, then down again, causing mirror reactions in the markets, it ended up starting another up trend, suggesting lower prices tomorrow at the open...



$SPX closed right on the green uptrending trendline generated from the March 2009 to April 2010 move.
There is a lot of resistance under here, and lower....


Here, on the $RUT, you can see the crossover of the magenta and ascending brown trendlines marked the low price of the day and started a rally that only seemed to finish near the end....


On balance there's a lot of resistance below us from different geometries across all of the indexes. If it wasn't for the very poor volume that powered this rally from the July 1st lows, I wouldn't be sure of what the trend really is....at least looking at intraday charts, anyhow.....

Very tentatively, we might in some tortuous fashion get down to the lower ascending trendline in both the $RUT and $SPX charts, before rallying again. Those lower trendlines on both charts were struck twice and held, so I assume they will hold again...So just as the decline from the April 26th high was not a simple affair, it's a reasonable guess that this uptrend we are in on a larger scale, is going to be populated by humps up and humps down...I'm assuming we are on a hump down, at the moment....

I may have more to say later...

Analysis: Wall Street mounts campaign backlash against Democrats - Reuters

http://www.reuters.com/article/idUSTRE66Q68G20100727

All the funnier, because the Democrats, barely did anything to 'em....

A contrary view...

From Hopper:

Maybe a possible small up coming shortly.

$RUT Trendlines as of Noon Central Time.

I just went a little short...

$VIX redux..

Still playing with the $VIX chart. It is possible to draw a 'completed' wedge:

And this has important implications, as you all well know....

Look at this next chart, something is deeply suspect about this rally, maybe it really is a turkey ready to roll over and die, despite the weekly indications implying more upside is possible....well, maybe not...

WikiLeaks: shaking the foundations of U.S. policy toward Pakistan - Reuters

http://blogs.reuters.com/afghanistan/2010/07/26/wikileaks-shaking-the-foundations-of-u-s-policy-towards-pakistan/

This is how it works, we aid Pakistan, they funnel aid back to the Taliban, they kill our soldiers, we give more aid to Pakistan, and on and on...

The Market Is a Hologram Masking Deflation - Max Keiser

http://www.huffingtonpost.com/max-keiser/the-market-is-a-hologram_b_660277.html

It is my thesis that the inflation, deflation debate is flawed because we no longer have reliable price signals. The overwhelming domination of program trading on various exchanges has fundamentally changed the way prices are created and represented in the economy. All 'efficient market' theories are dead. - Max Keiser

Maybe How Things Really Are...

Possible Top here...

I decided to exit, can always reenter...just enough negatives to make me think about safety...

Another Clue from the $VIX...

It looks to me, currently at least, that as long as $VIX continues to slide just under the dashed green trendline, the $SPX will continue up. This might be the litmus test to keep us on track...

Signs of strength, Signs of caution...

Signs of Strength:

Breadth indicators have risen modestly, on a weekly basis, not overbought on this time scale:

Put/Call Ratios not extreme (although $CPCE a little more problematic than the overall ratio):


$SPX breakout:

X-Trend indicator not yet at extremes:


Signs of Caution:

Short term:
$RUT at some high trendlines, trying to break through...


Slightly worrying sentiment appeared tonight:

Longer term:

Important question, when will this wedge in the $VIX resolve bullishly, and therefore bearishly for the market? This is not yet clear, but we have to watch it closely:

Nice up day today...

Put/call ratios favor more upside, no sign of extreme sentiment...

The Death of Paper Money -

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7909432/The-Death-of-Paper-Money.html

CNBC - 15 companies with zero debt.

http://www.cnbc.com/id/38331259?slide=1

Worth a look..

9 Electronics/Network/Media companies
2 Retail clothiers or furnishings
2 Biotech
1 Resale (EBAY)
1 Transportation and Logistics (EXPD)

Current channels, $SPX and $RUT

End of day, 07/23/2010.

When There Is No Rule of Law - Ron Paul

http://www.financialsense.com/contributors/ron-paul/when-there-is-no-rule-of-law

Dr. Paul agrees well with many others of conscience pointing to the reckless use of power and it's consequences.

As a side note, I went long early today and I am seeing gains. It's a small position, as another trendline hurdle and daily Bollinger Band resistance is overhead yet. But the trend is definitely up now....

An argument for Bullishness...the Weekly $NYSI chart

Stochastics has climbed above 20, which is a buy for that indicator

Breakout may be occurring now...

Some of the trading services I subscribe too have changed their stance to Bullish this afternoon. See also Hopper's updated chart a couple of posts back. He picked up a support trendline within his system this morning...

So it could be that the big trend change I have been talking about for few days is finally happening. We'll see..For now, I'm still out of the market until things are a little more solid...