Going into Monday we are net long although we continue to be VERY, VERY overbought.
We have a new format and layout on the M3 site that produces a true mosaic signal of momentum, mean reversion and market neutral signals. Thanks for the positive feedback so far.
Here's a look at today's M4 update and the things that bother me about the technical panels are 3 fold.
One> the continued divergence of XIV and SPY...historically this skew cannot be sustained and we are currently way outside the standard deviation bands, so that's a caution flag.
Two> the ALERT signal looks about to turn down...meaning a waning of momentum and a likely change in trend, that's another caution flag.
Three> XIV premium is fast approaching long term overhead resistance and when XIV reverses it tends to do so in a dramatic fashion, and that's another flag.
Maybe we're going to get a huge bump here and the markets are going to surge higher but the technicals suggest a frothy environment filled with multiple danger signals.
Apple reports on the 21st after the close and that may be the go or no threshold.
So far most earnings reports have been above expectations and VIX has been steadily falling..
