etfmsolutions: VDX Updates> SPY,XLU, FXI....10.17.15

Saturday, October 17, 2015

VDX Updates> SPY,XLU, FXI....10.17.15

This weekend's update of the VDX charts illustrates the market's overbought character, especially in the case of utilities, which we normally expect to be under performing a rising SPY. We are at a significant resistance level both nationally and internationally but the markets appear inclined to buy weakness in spite of less than stellar earnings by the mainstream.
I had a chance to conference call with the chief strategists for 2 of the largest investment banks and their prognosis to the end of the year was (1) neutral and (2) bullish with SPY around 220.
We are about to begin the 5 historically strongest months of the year (November - March) but that didn't turn out well in 08-09 so we don't want to bet the farm quite yet.
Earnings and fear of the FED continue to cause volatility ripples but the VIX is now down to the 16s so the trend is up until proven otherwise.
Next week should be instructive if we break through the current upper resistance levels.
Note the SPY's current status in the TrendX chart in the right side panel.

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