Wednesday, April 13, 2016

M6 SpIn....04.13.16

After 2 big up days the markets may slow down a bit into Friday's options expiration.  At least that's the odds based on the mean reversion mode of M6, which has managed to hold on to some modest gains using a top 2 ranking sort.  Compare the equity curves of the mean reversion and momentum modes to understand why the MR mode is preferable.
It was also a good day for delta neutral SPY players, although it looked a bit iffy in early going..
SPY is now at 208 and at MAJOR overhead resistance which we noted a few weeks ago as it was struggling at 204..
The big news overnight came out of China, which drove the global markets higher ahead of today's action. The few bad tidbits from retail sales figures failed to dampen the enthusiasm.
Note that the past 2 days have shown volume about  70% normal and that today's push was led by the Qs and XLF....the 2 sectors that we generally associate with high odds bullish moves.
We've seen these low volume melt-ups fact they tend to be the norm, but a few bad earnings may reverse course in a flash.