Thursday, June 20, 2013

Trap Door Opens...6.20.13

We never got the actually P6 and RSQ cross and yesterday's reversal sell off was a big one.
Today is more of the same with the advance/decline line (NYAD) hovering between .04 and .05 (a value of 1 is equal advancers versus decliners, so there are basically no buyers.

The VIX is up 16 % so far today....a huge move and the bottom has fallen out of both bonds and gold as the FED suggests the market prop up program may be easing.

The "trap door" pattern discussed previously is evident everywhere's the view of XLU, which looked like it was about to stage a strong rally.

The yellow line is an overlay of the VIX showing how previous spikes in volatility have been ignored by the utility sector.  This time is different.
It's important that we stick to the rules and follow the plan.  Here's an old archive file that looks at reasons why and what happens when some of the "smartest guys in the rooms"don't follow through.