Wednesday, October 30, 2013

VEGA Retreats...10.30.13

Note the developing hook on the SPY TrendX chart in the right side panel.  This has proven to be a reliable reversal signal in the past so it will be interesting to see if it pans out again.

To support this reversal we are also seeing a weakening of our ideal ranking alignment with SHY (our CASH proxy), starting a move to the left.

Two days of data have elapsed since the last VEGA post and we can see the short term ALERT has now crossed down through the P6 stop...signalling waning momentum in our #1 ranked SSO so open positions should be carefully monitored.

Arguing for the bulls is the typical Fall seasonal strength accompanied by the end of month bullish pop that kicks in over 70% of the time.  Does timing matter?
Arguing for the bears is a technically overextended market and some disappointing earnings and forecasts from medical, industrial and financial biggies.

Odds actually favor the bulls through the end of the year with a lot of eyes on a DOW 16,000.
This rosy scenario could be derailed at any time however by some unexpected crises that will get the worry beads working.

Alan Greenspan was on the Charlie Rose show last night and he said some very interesting things...among them that the prime emotion driving the markets is fear and the perception of doubt one of the reasons that bear markets fall much faster than bull markets rise. 
He had a few other nuggets of wisdom but I'll let you read his book to discover, if so inclined.