Friday, March 7, 2008

03.07.08 - Bouncing Around S1

Heck of a news day. In spite of all the violent action, Tick and A-D are relatively flat, albeit negatively sloped.

The VIX is slowly creeping up, now at 27.9. I usually find it best to view the VIX relative to its recent past... I still find myself surprised that it has not risen more on a relative basis. Although we are at levels that have indicated support for equities recently, it worries me there could still be a flush out to come.

It's difficult to pick support here as we break down, but to "throw a number out," I'd be looking at the prior intra-day lows of SPY $126 [Edit: $128 may be a more likely interim stop if one looks back to 'O6].

12:40PM CST UPDATE: Funny how the large caps are getting hit the hardest today... with continued indicated dollar weakness ahead, they should benefit more than the rest. XLF & IWM are only down half as much as the SPY, and Semi's remain in the green. So far no sign of a bottom though the rate of decent has slowed.

[Add] This latest political theater on CBNC is a complete joke. If congress has some specific allegations related to executive compensation, they should forward the supporting evidence to an appropriate prosecutor. I totally agree with the commentator noting they should be using their time figuring out how to help this economy move forward.

1:15PM CST UPDATE: Tremendous supportive volume spike as the SPY tapped against S2... let's see if it does anything (look for some higher lows in the impulse waves), I'm putting a little on -- if you are looking at this day to add longs, you have to think about legging in -- risk is still to the downside.

2:35PM CST UPDATE: Anticipation of a Monday Fed action? In any event, I'll give a rare toot of my horn as I called the bottom within five-minutes. Use stops and watch the VWAP in particular... still not convinced this will stick. If I stop out and the market does slip back I'll think about holding again over the weekend. This is a quick trade environment, which is definitely not my style, but we are down over 7% over the last 8 days or so. Perhaps we are due for a small bounce.

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