06/08/2013 Weekend Update

[Cobra]

Except the Smart Money still near record high short, I don't see other usual weekend updates worth blah blah.

[Cobra]

Algo and institutional buying and selling action from stocktiming. I don't see anything they predict other than reflect what is happening.

Algo is not oversold yet.

Institutional buying and selling action shows more institutional distribution than accumulation.

[Cobra]

II and AAII. II still mostly bullish while AAII near bearish now.

[gappy]

IT close via Fideilty:

Cap.PNG

This is Cisco propaganda, but if there is "any" truth to the projections, there should be a buck to be made somewhere. http://www.cisco.com/en/US/solutions/co ... Paper.html GL next week.

[Cobra]

Summary of the week's stock picks. A glorious week with no false breakout.
viewtopic.php?f=10&t=942&p=133013#p133013

[Cobra]

stock picks for the next week.
viewtopic.php?f=10&t=949&p=133016#p133016

[Al_Dente]

Top Panel:
I don’t know how long this divergence can go on.
Emerging markets are now so huge, they MUST realign with the majors soon, either by the emerging mkts moving back up, or the majors moving down.
I won’t bother to chart this back 10 - 20 yrs when emerging was just a gorilla-embryo; this is the new world.

[An interesting read here, especially since Evans-Pritchard is a well-known perma-bull… (hat tip: Josh Brown)]
http://www.telegraph.co.uk/finance/comm ... -risk.html

[Al_Dente]

[Bespoke] Best performing countries, ytd year-to-date

More here, including the worst performers:
[Peru has been the worst this year with a decline of 22.63%. btw: Peru has the #2 largest copper mine in the world, Chile is #1]
http://seekingalpha.com/article/1488722 ... et-returns

[jademann]

I am pretty sure this means something important but what?

http://stockcharts.com/h-sc/ui?s=XIV:$S ... 9950280182

[nightlyhawk]

Short-term: more up next week???

[nightlyhawk]

Mid-term: Lower low within 2-month???

[kongen]

I am pretty sure this means something important but what?

http://stockcharts.com/h-sc/ui?s=XIV:$S ... 9950280182

I suspect it merely reflects the usual lag in VIX, which is coming back down, but still elevated.

[jarbo456]

Quiet weekend bored. Is everyone short and holding their breath, or smugly happy holding long?

I know none of you guys are so unsophisticated to think that equity research is a good source of actionable trades, but here's an article that explains a bit further: http://www.fool.com/investing/general/2 ... comme.aspx

[jademann]

I am pretty sure this means something important but what?

http://stockcharts.com/h-sc/ui?s=XIV:$S ... 9950280182

I suspect it merely reflects the usual lag in VIX, which is coming back down, but still elevated.

I was looking at the trend, which recently looked like it was starting to roll over and comparing it to the tipping point two years ago.
It is probably nothing though.

[Al_Dente]

Short term volatility

[Al_Dente]

“Hedge Funds Haven't Owned This Much Of The Stock Market Since Right Before The Crash In 2008”
http://www.businessinsider.com/hedge-fu ... eak-2013-6

[Al_Dente]

ON AVERAGE:
"On average, going back as far as we have stock market data, history suggests that we get an average of three 5% pullbacks each year, one 10% correction each year and a 20% sell-off every three-and-a-half years"

As of Thursday 6 June, we've had our first >5% pullback of the year

[Al_Dente]

CORRELATION STUDIES:
The Volatility indices were designed by dyslexics (the Put/Call Ratios were too).
So I usually invert them so that a spike up in inverted-volatility should correspond with a spike up in SPY, and the opposite with spikes down. It’s just easier for me to “read”.
So this correlation study is also inverted. Top panel is inverted-VIX with SPY in grey behind, and second panel is inverted correlation, which should be in agreement with the top panel.
THE POINT IS that this year appears to be very different from last year.
Note that last year, SPY liked to BOTTOM when 1/VIX was at 100% perfect correlation (neon green boxes = 100% perfect correlation, and the vertical dashed lines represent SPY bottoms)
Meaning: when everybody is perfectly aligned…. they’re wrong…. when the options traders (VIX) get 100% perfectly aligned with SPY…. it turns….
However this year the correlation hit 100% only once, in Feb, and it was a fail [blue box].
Otherwise, the options traders (VIX) have not been in 100% perfect sync with SPY all year [aka: they have not believed in this rally….. they have been more inclined to buy put-protection rather than long calls for much of the year…]
I AM REQUESTING comments on this, especially from folks who study correlations, as I don’t really understand the current implication here.
[I don’t need any comments on inverting the VIX…. It’s just easier for me…. that’s all]
[ps: vote snake sunday: https://stockcharts.com/public/1684859]

[jademann]

Perfectly correlated the CORR function would give 1.0
Perfectly uncorrelated the CORR function would give -1.0

http://stockcharts.com/h-sc/ui?s=$ONE:$ ... 6596668785

Recently the VIX is showing less correlation to the SPX index.
Possible reasons: manipulation? Higher fear at index highs? highest correlation occurs during bottoms.

[joegamma]

CORRELATION STUDIES:
The Volatility indices were designed by dyslexics (the Put/Call Ratios were too).
So I usually invert them so that a spike up in inverted-volatility should correspond with a spike up in SPY, and the opposite with spikes down. It’s just easier for me to “read”.
So this correlation study is also inverted. Top panel is inverted-VIX with SPY in grey behind, and second panel is inverted correlation, which should be in agreement with the top panel.
THE POINT IS that this year appears to be very different from last year.
Note that last year, SPY liked to BOTTOM when 1/VIX was at 100% perfect correlation (neon green boxes = 100% perfect correlation, and the vertical dashed lines represent SPY bottoms)
Meaning: when everybody is perfectly aligned…. they’re wrong…. when the options traders (VIX) get 100% perfectly aligned with SPY…. it turns….
However this year the correlation hit 100% only once, in Feb, and it was a fail [blue box].
Otherwise, the options traders (VIX) have not been in 100% perfect sync with SPY all year [aka: they have not believed in this rally….. they have been more inclined to buy put-protection rather than long calls for much of the year…]
I AM REQUESTING comments on this, especially from folks who study correlations, as I don’t really understand the current implication here.
[I don’t need any comments on inverting the VIX…. It’s just easier for me…. that’s all]
[ps: vote snake sunday: https://stockcharts.com/public/1684859]

The attachment 69correlation_png.png is no longer available

Anthem heard at The Dyslexics Convention was: "dyslexics of the world-UNTIE!"

In McClellan daily letter, his wit wrote about "trader logic", I posted a few charts friday am (on thursday nite forum, charting the discrepancy between CPCE (equity only) and CPCI (index only), his point seemed to be that participants do not expect stock prices to go down but they do expect
index prices to go down. I forget what psychologists call this type of human bias where everybody thinks their portfolio will perform better than everyone else's average.