Ponzo Update....01.21.15

Here's a look at the updated Ponzo risk chart for SPY for the next 6 months.  Since our last update the odds have consolidated even more towards a neutral stance although the short term odds are slightly bearish,  Just something to keep in mind going forward,

On a Bullish Cusp....01.20.15

There was modest positive momentum and the volatility divergence between XIV and VXX is starting to reconcile, suggesting the beginnings of a tradable trend in the near future (maybe tomorrow).  XLE continues to muddy the waters, but stepping back for a longer term view the SPY TrrendX is now in a potential bounce mode back up to resistance ....see right side panel.

OP EX Volatility....01.16.15

Another wild ride Friday as the markets reversed historical  patterns for weak Friday closes, especially on Op EX Friday's.  The rebound was widespread and the advance/decline line saw significant improvement after an early morning swoon so all eyes are on Tuesday's action to see if there will be a follow through to the upside.
One suspicious tell is that utilities are still leading momentum (see VEGA below),

More of the Same + a new BUZZ.....01.15.15

We revisited many of yesterday's lows today, as the market commonly does during periods of persistent selling.  Options expiration tomorrow and statistically the odds favor a weak close although we may see strength at the open.  It's only noon so we may see some buying into the last hour but earnings reports are still what's driving prices and there's still a lot of them to report so the froth could continue for a while.
Meanwhile I've revised the morning BUZZ link to more fully reflect the bigger picture of market dynamics,  The link is free, of course, and is provided courtesy of Worden Bros, at 7 AM PST each morning.  See the legend on the site for column descriptions.  I've included the current short interest ratio for each component as a additional measure of sentiment (and risk).

VIX Moves to Overbought Levels...01.14.15

Bad earnings by JPM whacked the financial sector hard while weak retail data dropped the big boxes,
The DOW was off 350 at one point on accelerating volume although there was recovery into the last hour and in the  after hours session.  As I mentioned yesterday's M3 post its all about earnings for the next week or so and options expiration this Friday will only exacerbate the current volatility,
Best recommendation for now,,,trade small or be willing to accept above normal risk,
Not surprisingly, XLU (utilities) was the strongest sector intraday (see Vega below)

Volatility...word for the day...01.13.15

That was one for the books as the NYAD range today was .39 to 5.39 with the DOW up 280 points at one point only to plummet to down 140 points.  The  SPY TrendX in the right side panel is basically in stasis and both M3 and LM are safely in cash.
There was a bit of buying after hours today but its way too early to get bullishly enthusiastic,
Today;s BUZZ signal on the M3 site was the high of the day ,,,,it got messy from then on,

Here we go again...01.12.15

The markets bottomed within the first 30 minutes and spent the rest of the day going sideways.
The SPY TrendX signal is not encouraging for the bulls.  Earnings season is upon us so expect day to day volatility to increase.  Is a paradigm shift close at hand?  We'll find out soon.