Wednesday, February 10, 2016

PONZO Updates for SPY and VIX....02.10.16

This week's PONZO updates suggest some possible recovery for SPY and flattening of the VIX range, although not a reduction. So far this year the PONZO has does done a good job of keeping us on the right side of the market bias even though traditional technical analysis indicators have not fared so well.  The elevated volatility levels (VIX at 25+) , increased daily volume and trading wide open to close trading ranges have all contributed to a unstable market where nothing is safe although the utilities and some bonds have had a good run. The lack of follow through days on opening strength is more than worrisome.  The few strong closing days we have witnessed have been reversed strongly and quickly suggesting more short covering action than genuine accumulation.
For now,  cash is the safest position.