LESS IS MORE
Just to apologize, blogger will not let me put spaces in between paragraphs today so I am sorry this is just one big narrative. I hope Blogger has not jumped the shark, it sure has been a great tool up until recently.
One thing I have never been able to figure out is that when I go through periods with technical problems or travel, and miss a day here and there of new posts, I get the most traffic to the blog. I guess that means that people get tired of hearing me pound Barry? I had the biggest one day traffic I have ever had in my blog the other day on a day I did not have a new post up due to technical difficulties with Genesis. I am not sure how to take it but I guess with a thick skin!
Above is the chart of the VIX. Regular readers of this blog know that I think this is the single best tool to pick swings in the SP500. It has it's shortcomings just like anything else, but overall it is very good. Unfortunately right here it is giving conflicting information. The trend of the VIX itself is up, yet the trend oscillators are both pointing down. This kind of mirrors what the SP500 chart itself is telling me, so as a result, I just don't see a trade there at the moment. It does appear to me that we are on the verge of this dip now not being a buy, but I just cannot tell yet.
When I am unsure I do nothing, so that is the plan in this market here. We do seem to be getting a good lift off in alot of other markets today so that may be a sign that we are going to hold here, but I just don't know plain and simple.
One other thing that I have noticed which I think is a bit unusual, is the very high correlation between individual stocks and the indexes. You might say, what a dumb ass of course. In reality this is rarely true to the degree it is right now. Often stocks trade on their own fundamentals and are often influenced by the indexes, but not to the degree that they are right now. I think the reason for this is simple. The last hope for somehow kicking this can down the road a bit more, is the stock market. There are so many problems outside of it, that it is the last man standing. The government has manipulated the indexes to elevate the markets so this is what you get. Now all the charts look the same.
I suggest you keep this in mind when trading stocks and determining risk. Do not get aggressively long or short unless you think the indexes are going in the same direction.