Sunday, July 31, 2011

31 July 2011

 The McClellan Summation index's rate of change (orange) is outside of its 2 std Bollinger Band.  As is the rate of change of the rate of change (acceleration - green line).  Using this info and the VIX below, I closed my shorts Friday at small profits because I thought a resolution would be made and the market would be ramped on Monday.  Also, the current point is above the previous low by a decent amount.  This could be signalling short term strength.

Well, the Bradley Siderograph turning point (was it for gold, or stocks or bonds?  We'll see) has come and went.  It appears that there is some sort of debt "resolution" that has taken place over this weekend.  In a few years, we'll have to raise the debt ceiling again.  This is the problem with money loaned into existence.  It always takes more money than currently exists to pay the interest on what does exist.  Think about it.  It causes the monetary base to need to grow exponentially.
 VIX above 500 day moving average, BUT, closed above 200 day moving average 2 std Bollinger band.  I figured this would serve as some resistance in the short term.
 Nearing oversold in the medium term, but definitely not as bad as the previous peak.  This could be viewed as strength.
Still oversold in the short term.  This is another reason I closed despite the weak day on Friday.

I'm not sure where we head from here.  I'm not buying yet because I still think there will be a shake out even if we bounce hard tomorrow.  I'd like to see my short term indicator bounce positive and then trend lower to make a higher low than this one before I'd buy anything.

"Paper money eventually returns to its intrinsic value - zero."

"To see what is in front of one's nose requires a constant struggle."
George Orwell

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