Yesterday and Today
Yesterday
The day opened like it has for weeks ā a big gap and then a pull back from the highs (or lows). The difference was that yesterday saw only a small pullback and then closed on the highs.
All things were working for the benefit of a +400 day.
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China didn’t drop 6%. Actually it was down 1.5% and then closed up on the day in a last minute rally.
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Oil didn’t die. It was down $1.80 at in the night session (before the open), but managed to get back more than $1 of the drop.
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Bonds took a dump with the TLT down 1.81.
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Shorts were confused.
TODAY
Yesterday looked like a real rally to me, and given that we are still miles away from the 200 day moving average (on the downside) I have to believe we will keep going higher. Maybe this move yesterday was a head fake and I am gullible, but I think we saw yesterday what the market wants to do when there is not a preponderance of negative news out.
OPTION TRADERS
The VIX fell 2.90 yesterday and I am expecting more of a drop today. It is still trading at 24.9 which makes sense considering the moves we have been having, but making sense is not what the VIX does. It goes down on up days, and it climbs on down days. Meanwhile traders seemingly forget that it is not the direction but the amount of movement that should determine the VIX. Maybe I write a dissertation paper on this?
I waited the whole day as it appeared (to me) that we were going to close on the highs of the day. I suspect there will be follow through on the open, so I wanted to wait to add the THIRD leg of the RANDOM WALKER until today. Movement is our friend.
POT is held each Wednesday night at 7:00pm eastern.
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Too True To Be Funny
So what is harder to predict than the market….does she apologize today or say she wont apologize?
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