To Streak The Sky With Sparks

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Asteriod Of Skymorphis Gory Blister

If the warp speed in which information travels these days has got the metaphorical planets (us) spinning wildly around the sun (the markets)-see Monday 1/12/15 Daily, which in turn impacts the market’s price movement to create crazy volatility, what does that mean for us? Did we get hit by a meteor, knocking us off our orbit?

Interestingly enough, as a market more range bound, albeit touching the boundaries of the recent lows and highs rather swiftly, the indices are still within the range from the December high to January lows as of Tuesday’s close.

The S&P 500 although trading below the 50 DMA (warning phase), I find the positive slope (which is still rising) reason to at least think we need to remain delta neutral and not switch to a bias of more bearish or bullish right now. In other words, our portfolio is positioned fairly evenly long to short until a reason to switch to a more negative or positive bias becomes apparent.

Same applies to the Dow and NASDAQ-both held critical lows, with inclining slopes on the 50 DMA. The price of both are trading beneath the fast moving averages which are accelerating downward in slope. Now add this; the IWM or small caps had broken its 50 DMA intraday, giving me reason to think the lower end of the January range 114.36 is in the cards, UNTIL the last few minutes of the session when IWM roared back to defend the bullish phase.

Writing this out for you also helps me understand that other than continuing to expect a range bound market at least through Thursday, keeping neutral on asset allocation until then, loving the entertainment factor that high wild volatility brings us, yet avoiding reactionary trading, I at least keep my head on straight. Just like that bowling ball (head) on a stick (spine) my chiropractor reminds me to think about.

China, by the way, which I wrote last week is perhaps now where the upside potential is moving to, could also interpret as our market is chillin but not necessarily freezin.

S&P 500 (SPY) 200.50 next support which was Tuesday low. In order to at least say we could see the top of the range, we need to clear and close above Tuesdays high

Russell 2000 (IWM) Still in a range between the December low and January high. And held onto the 50 DMA.

Dow (DIA) Confirmed the warning phase

Nasdaq (QQQ) 100.69 support, then 99.00. Over 103.65 much better in the anything can happen market

XLF (Financials) Under 23.67 Tuesday low, not pretty with lots of earnings in this group coming up

SMH (Semiconductors) Gave a valiant effort to hold up but now, under 52.00 could shift everything to a more negative bias

IBB (Biotechnology) If this breaks 310 another negative

XRT (Retail) Possible double top at 97.15. 92.75 the 50 DMA

ITB (US Home Construction) I believe I wrote that if long Monday was the day to take profits-today is the day you probably got stopped out

GLD (Gold Trust) Will give this time to see if basing or just run to resistance once again

USO (US Oil Fund) Double the average volume, closed near top of range-could be reversal and bottom but we have seen this before so needs confirmation

XLE (Energy) Still defending the 2014 low

TBT (Ultrashort Lehman 20+ Year Treasuries) TLTs 132.61 now the high with a close under that interesting. 130 pivotal

UUP (Dollar Bull) No real concerns unless it breaks 24

FXI (China Large Cap Fund) The ETF is not easy to trade but the new high multi-month close is noteworthy