etfmsolutions: As Bad As It Looks....8.2.14

Saturday, August 2, 2014

As Bad As It Looks....8.2.14

Note the TrendX charts of SPY and XIV in the side panel...both have broken through long term support.....meaning either we are below support and due for a rally or we've suddenly entered a bear market. Not to be flippant here just to point out that things could go either way at this juncture.
The SPY,SSO,VIX chart below dramatically illustrates how XIV has imploded over the past few days. The XIV premium that accumulated over June and July has effectively been erased in 3 days. It's well known that bear markets fall faster than bull markets rise but that's crazy. Another day or 2 of bear action will completely eliminate the XIV premium...a scenario that few would have predicted only a week ago.
VIX is kissing 18, which is technically a longer term resistance level, so the markets really are on a ledge at this point.
M3 remains in cash per Friday's pre-close signal. (see Friday's post)

PLEASE NOTE: Daily updates to the newly refined M3 signal will be posted on the new M3 site. Just click the "Login" tab...no password is required. Free access will continue until August 15th.
General market comments will continue to be posted on this newsletter site.
There will be no newsletter posts or M3 updates this Monday-Wednesday due to my travel schedule.

Commentary and Updates

Mosaic Solutions commentary is typically published daily as time permits and market action warrants.
Posts feature Mosaic model updates including delta neutral stops, VIXEN directional trades and PONZO forecasts.

NOTE: Posted risk exposure indicators, signals and metrics apply to Mosaic models only. They are not directly correlated with price movement in the major market indices and can not be used to forecast directional changes in those instruments.
Each Mosaic model is a unique blend of risk factors and must be treated accordingly.

TRENDX is a proprietary Mosaic market signal that blends volume, RSI, momentum and rate of change.

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