S & P FUTURES UPCOMING SELL SIGNAL
I have been talking about a bounce in the stock market and thus far we have not gotten one we have mostly gone sideways for the last few days. Now we are drifting down into the area where the VIX is saying sell if we go much lower. It is said that sometimes the best signals are failed signals in the opposite direction. In this case a failed buy signal marked on the chart could be construed to make the sell signal coming better. I do not have any idea if that old axiom has any validity. To me a failed signal is just that a failed signal. I don't think it has anything to do with the next signal that comes along. Often a failed signal can be a sign that market conditions have changed but we never know that until quite some time down the road from here.
What would make a sell signal really interesting to me now would be for us to rally a little or even sharply but for a brief time. After that the Vix should drift down into the bands for a sell signal. At that point we would likely be toward the end of the month and right into the EURO chart sell zone time frame. The sell bands are a ways above now so I would like to see us get up to them to enter a position type of trade. If we fail short of that level the short trade for me will be a short term trade.
What to do with the Bond Market?
So many people are eager to short the Bond Market due to the general consensus that inflation has to be coming with all the money printing the government is doing. As per my usual stance I am not in agreement with this argument. The general problem that I see and have been stating this over and over in here, is we are battling deflationary pressures. The FED is doing what they are doing to prop things up not to try to stop them from going up. If you took out all the stimulus they have injected into the economy we would have a massive deflation wave going on right now. We would also have stocks dancing around 5000 - 6000 basis the Dow. Now that the FED stated today that they are going to keep rates low into 2016 it is hard to imagine how we could have a huge rise in interest rates while they are buying so much of our bond supply.
However, with all of that opinion aside I will simply just watch the trend. If I see it change I will get short regardless of any economic view I might have. For now the trend is still solidly up and at the moment there is no sign of that changing any time soon. I do not see any imminent trades in Bonds right here.
Most markets are in the mode where they need to bounce to set things up. I did blow a trade in Soybeans recently. I wish I had a good reason why I missed it but I don't other than I just blew it. I wish I had at least called it out in here and I did not even do that. Hang on a minute... uh.. umm, no I sold the exact high and bought the exact low on a 30 tick chart 41 times in a row come to my seminar!