I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Monday, June 21, 2010


In Friday's post Slowing?, I had this to say:

There is definitely a lot of indication that this move is slowing

1) It keeps flirting with the lower channel line
2) Negative divergence on 15 min, 30 min, and now 60 min indicators
3) Acc/Dis indicators are either flat or slightly distributive

I still think we might get a pop Monday morning, but I have the sneaking suspicion it will be followed by a drop

So far that looks to be playing out. We got a perfect 50% retrace on the wave. Here are my updated charts:

Also I want to point out my VIX chart. In early May, I wrote this post Impressive VIX and I made this chart:

Here is the same chart with the same exact green projection.

The reason why I made this projection, and is the same reason why I think the countertrend rally is now done, is that over the past decade, major events (some of them reversals) have taken place at the black line, what I am calling the long term Line of Action. We had a major breakout on the VIX, and I was theorizing back in May that the next pullback would retest and bounce of this important trend line.

Lets see if that theory holds water.

Here are my longer term VIX charts:

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