Extreme Levels
The VIX, or the Market Volatility Index, is another sentiment
indicator which is used primarily at extreme levels. The extreme levels are
currently 20 (sell signal) and 30 (buy signal). What you’ll notice from the
chart is that the VIX has been at an extreme level for sometime now. As the
market goes down, the VIX remains low, which is a negative sign.Â
In regards to the Fed meeting, I expect to see a short knee-jerk
reaction following the meeting, following by a slight pickup in trading volume.
Today’s Watchlist:Â Â
(
EFNT |
Quote |
Chart |
News |
PowerRating),
(
SCMR |
Quote |
Chart |
News |
PowerRating),
(
ARBA |
Quote |
Chart |
News |
PowerRating)
Efficient Networks
(
EFNT |
Quote |
Chart |
News |
PowerRating)
is poised to break down. The recent failed rally is the third in a series. It has
been unable to rebound since its greater than 50% haircut in July and August.
Set your alerts below Monday’s intraday low when looking for a short
opportunity. Watch for support and a bounce near the May lows, just under 40.
Sycamore Networks
(
SCMR |
Quote |
Chart |
News |
PowerRating) broke out last week from a near-term resistance
level. After making a strong move to the upside, it pulled back for two days. On
Tuesday it bounced off of the trendline that it has formed from its lows.
Aggressive traders may want to play a move above Monday’s intraday high toward
the all-time high, while more conservative traders will wait for a move into
blue sky territory, where there is no overhead resistance.
Ariba
(
ARBA |
Quote |
Chart |
News |
PowerRating) has entered a very nice consolidation pattern.
The volume has been light during the consolidation, suggesting that traders are
waiting for a move outside of the range. Set your alerts near the high and low
of the range and watch for a closing move outside. Note that the low of the
range is also the breakout level from the top of the high-level cup that had
formed. Should it close outside of the congestion area, watch for a continuation
move on the following day.
Until later,Â
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