VIX technical outlook – market update

The VIX turned exactly with the daily 13 combo in a week 9 (setup) count at the market highs. That is a powerful combination and works quite well. Today we have a 4 (setup count) and that will finish with a 9 count around 35 probably but for now we made a 62% retracement and hit the daily Bollinger hence a wave B up can be expected starting tomorrow. That might bring the VIX back up to 60.

Volume is again low so we have a rising (one may call it printing higher prices) without any real buying interest. Morgan Stanley today warned to be short – but I rather would warn to jump now on the bull train as we will have a severe set back soon and that will be the point to buy. The argument sold today is that Obama is a fresh start but the problems are so severe that who ever gets president will only have the chance to react and there is no means left but to print more money. Still, the corrective upside wave will be even more substantial as people get to believe again they survived the storm or as someone called it

Excerpt from Bloomberg:

“The market has come to the conclusion that Armageddon is off the table,” said Philip Orlando, who helps manage $330 billion as chief equity strategist at Federated Investors Inc. in New York. “The elimination of the uncertainty of the campaign typically results in an end-of-year rally and you’re starting to see that today.”

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~ by behindthematrix on November 4, 2008.

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