Monday, December 27, 2010

Ptience Iago Patience

SPX made a LH and LL  and closed in the plus   column that is positive. I have seen this before kind of few times lately.  Range was 7 better than the last few days.   It gapped down and made the low of the day by 9.35 and then there was no looking back.  It barely missed being a cloud walk day but it is a DKOD and at the very end of the day it lost about an 1/8th  of the low to high range.  All in all this spells not bearish sign with a big N.  RUT did very similar except it was not a DKOD.  RUT closed within 1/2 a point of the high of the day.  That is quite negative for RUT.  The probability is over 70% we will have a 8% decline during the day.  And that is a problem SPX says up RUT says down.  I am short TNA.

These 2 charts are of interest rates.  On left short 20 yr ultra meaning the trade is for the interest rates to go up on right is the opposite.  I saw the decline on the short side from 60 to 30 produced a rally of little over 11 points or 38% approx and the rally on the right from 66 to 105 produced a decline of 33 points which is more than 75%.  I know the 3 fers have decays built in them but this much one is down twice as much as the other one is up.  My conclusion is the optimal way to trade these is to short them both simultaneously.  Thanks to our YODA Anchak who put it in the right words.
The chart on the right is SPX hourly.  I believe we have a very few hours left for it to top.  As far as the points go there may be a one huge panic buying with SPX up 22 points to put an end to this run.  I have expanded the top channel by a 1/2 amount now it has 4 equal section.  1 went up 2 section so should 5 IMO.  So while we wait..  some bizarre end may be coming. 

The chart on left is FAZ. After a false bounce it has settled back to decline.  The bottom of the channel is at 9.17 and as I discussed yesterday the high on FAS for it to have resistance is 29 - 29.4 if it gets past the 50% point at 28.4.  As I see it all this could happen quite soon and FAZ should get a good bounce. 
I am still bearish just waiting for the roll over. 
Thanks for reading my blog and offering me encouragement.

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