Monday, April 25, 2016

VDX Updates ...04.25.16

There are times when fundamentals (as in earnings reports) trump technical signals and 4 times a year we are witness to that decoupling....currently underway.  The name of the game is of course, SURPRISE earnings, in which the surprise tends to be to the downside with resultant price collapse and generally hesitancy going forward. Such was the case with GOOGL,MSFT and SBUX last week and XRX today.  Sometimes those analyst A rated stocks just don't deliver the goods.
Apple is out tomorrow to further shake the uncertainty tree and for now we are taking a cautious and low exposure stance.  Delta neutral is the safest way to play earnings season IMHO...similar to a straddle or a strangle but somewhat easier and faster to navigate.
Note the inclusion of the SPLV VDX chart at the bottom, which we'll be looking at in greater detail as the week goes by.
Why do the SPLV  VDX and VDI+/- charts look more like TLT than SPY???????