Saturday, June 23, 2012

SPX vs Delta - VIX - Tides - Astro-Indicators - EW

2012-06-26 (Tue) = High
2012-06-27 (Wed) = Low
2012-07-03 (Tue) = High
2012-07-04 (Wed) = Low
2012-07-30 (Mon) = High
2012-08-08 (Wed) = Low
2012-08-29 (Wed) = High

The Option Strategist Weekly Updater 6/22/12  
The stock market had just about everything going for it in technical terms this week, but then the fundamentalists delivered a nasty blow today (Thursday, June 21st). Technically $SPX is just below the support level of 1330-1340.
Equity-only put-call ratios remain on buy signals, despite Thursday's large decline.
Market breadth was very poor on Thursday. As a result, both breadth oscillators registered sell signals.
Volatility indices ($VIX and $VXO) were the last indicators to turn positive earlier this week. That occurred when $VIX fell below 21 on Monday and then proceeded to drop to 17 by mid-week. As we have been saying for some time, $VIX above 21 is bearish for stocks, while $VIX below 21 is bullish.
In summary, the technical indicators remain bullish, except for breadth. We are going to give the upside the benefit of the doubt. But if $SPX should decline further, or if $VIX should close above 21, or if the put-call ratios should roll over, then we would have to relinquish our currently bullish stance. 

Tony Caldaro's Weekend Ppdate (June 23, 2012) 
The recent rally from SPX 1267 to 1363 started off impulsively as it was unfolding. We were expecting the rally to reach either the 1363 or 1372 pivots in a five wave sequence ahead of the FOMC meeting. The pattern, unfortunately, looked like three waves on tuesday as the FOMC began. After tuesday’s high, and wednesday’s volatility, the market sold off on thursday to SPX 1324. This selloff overlapped the first rally from SPX 1267 to 1329/36. This made the entire June rally look corrective. As a result we have labeled the SPX 1267 low as a wave A, and the recent rally as a wave B. The most probable scenario suggests a wave C is underway to either retest the June lows or make a lower low in early July.

Elliott Wave Update ~ 22 June 2012 would be ideal for the wave structure if Monday made a quick lower low beneath Thursday's low prior to any retrace into 1346 - the bottom of wave i. This would complete a small 5 wave pattern down from the recent rally high peak of 1363.46.