I’ve been gone a few weeks on a trip to Europe. Instead of the usual chart, I have a photo taken in Santorini, Greece. I won’t bore you with many vacation photos, but I haven’t refocused on the market yet. I tried to stay away from the news as much as possible, as I didn’t want to get depressed and ruin my trip. I thought I’d get many high fives from Europeans regarding Obama, that is as soon as they realized I was an American. But the subject didn’t come up. That surprised me. It was nice getting the image and sound of The One out of my head for a few weeks.
The overall market has gone up in my absence at what seems to be sidelined money looking for something to do, rather than on positive fundamentals driving demand. The intraday swings still seem to be rather violent and choppy, although implied volatility has come down quite a bit from recent levels. The VIX still remains historically high, but well off the highs and almost to what seems sort of a normal level. I see many bearish divergences on that last push up on the major indexes and many stocks. Nasdaq and energy seem to have nice uptrends, despite recent divergences. Financials indexes seem to have broken the uptrend, although some of the individual financial stocks still show healthy uptrends. S&P 500 has pulled right back to an uptrend line, with my trend indicator still holding onto bullish mode, with momentum back to oversold levels. Chart looks like it wants to roll over, but that look usually gets me in trouble, so should give uptrend benefit of doubt. If this decline holds here, I’ll look to go long the Nasdaq if momentum should reverse back to upside from its current oversold level. If a bounce fails to materialize, or fails to push very far, I’ll short The S&P, but only if momentum can push up out of the oversold area and then roll back down. I have no position, so will let the market tip its hand. I’ll try to post chart as soon as I get caught up, and over jet lag.