Talk about the little guy moving the markets! Friday was one of the lowest volume days of the year but volatility was a real eye opener as the morning bullish pop was erased and then negative by the end of the day (shortened session). A day trader's delight.
For longer term investors the implications of Friday's collapse remain to be seen if only because of the low volume. Monday being the first day of the month is expected to be bullish so any weakness may be a harbinger of weakening momentum of SPY.
That's exactly what we're seeing in the SPY Trader model as XIV has moved out of the #1 spot and the money management stops put us in a CASH position back on the 25th. This same weakness is reflected in the equity curve and the SPY/SSO pair chart is now at the make or break zero line.
Meanwhile, over on the Small World model the equity curve has continued to climb largely due to the strength of EWG (Germany). In contrast to the SPY Trader, Small World in still in a vested mode although the 90 day charts are clearly showing a negative tone relative to the 30 day charts so we're keeping a close eye on a possible reversal of the 2 Day Alert so as to preserve recent gains.
