Here’s today’s M3 closing signal as of 12:45 PST.
We got the expected drop and pop and and we’re back in the drop mode for the weekend. After an impressive rally at the open XIV has crumbled once again and is down almost 5% into the close.
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Today I will update a little Fed Day related research I last showed in November. Nights before Fed Days have historically been pretty bullish, often leading to a gap higher. But interestingly, this has not held true when the market is already at an intermediate-term high. Below are a couple of studies that demonstrate this. The first one shows results of going long all nights prior to a Fed Day when the market did not close at a 20-day high.
The addition of many small details can make a big difference in seemingly simple strategies. I often like to use cooking analogies, and so I like to think of tomato sauce as a classic example: it contains few ingredients and is simple to make but difficult to master without understanding the interaction between components. Read the rest of this entry »
IWM currently holding on to its 200 day MA at 113.52. Below there it will be important for the recent low of 112.20 to hold. Getting and staying above 114 would be a good first step to a possible recovery back to highs. GDP/FOMC/NFP are all slated next week and could provide a large moving range between 196 to 202 SPY.