VIX Not Going Down Without A Fight
For the remainder of the week, one of
my long-time colleagues, Bo Harvey, will
be writing the morning commentary. Bo has traded with me for the last
two years and has developed
into a very consistent trader. I trust that Bo’s
unique perspective on the market will prove to be helpful to you each
trading day.
I will resume my commentary
on Monday morning.
Volatility
does not die instantly, thank goodness.
Yesterday’s action offered several setups in both directions
from an HVT standpoint:
To the long side in the morning and then to the short side in the
afternoon. Now
whether we will continue to have similar great intraday setups and range is
another question entirely, one that I can’t answer.
So, rather than try to predict whether today’s action will provide a
profitable dose of volatility or not, I will simply offer a few observations.
The
financials and retailers were certainly moving around well with good volume
yesterday. With
everyone suddenly concerned about whether the consumer will continue to hold up
the falling anvil called the economy, the earnings of retailers are front and
center. Retailers
that issue any negative news are taken out behind the woodshed (witness [BBY|BBY]
and [HD|HD]
last week). Financials,
meanwhile, seem to be involved in every story springing up from Brazil to Waco.
Hopefully all this attention will keep both sectors in play a while
longer.
The
semis continue to be a weak link and will have to stop their slide if the Naz is
to get any gas to the upside.
In the SOX, 282
is key support while 324
is key resistance. Expect
a battle between bulls and bears to center around control of the 300
level.Â
As
for the broader indices, 912
was a key confluence number in the S&P futures that held us down pretty well
yesterday, and until it is broken, the path of least resistance still remains
down in my book. Key
support to the south will be 884 if the bulls are going to salvage
this bounce. In
the Naz futures, we closed under a resistance trendline that extends back to the
5/17 highs, and which served as decent resistance yesterday.
The fact that we have a divergence between the S&Ps and the Nasdaq on
the daily chart may hint at some choppiness ahead as one plays “catch upâ€
with the other.  Â
Simply
put, play ‘em as you see ‘em.
That means take advantage of what is present: If volatility continues to
decline and choppiness sets in, don’t hesitate to lighten up on the frequency
of your trades. For
an     Â
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 923 | 965 |
| 912 (key confluence) | 947 (key) |
| 902 | 936 |
| 898 | 917 |
| 892 | 898 |
| 884 (key) | 878 |
| 874 | 865 (key) |
| 868 | |
| 856 |
Bo