Everyone is gapping this morning, obviously, in response to the big players in the European Union deciding over the weekend to put some big money in support of the euro.
| trend | adx | psar | pps | macd | macd trend | sto | sto trend | |
|---|---|---|---|---|---|---|---|---|
| SPY $116.49 | ||||||||
| VIX 26.06 | ||||||||
| TLT $93.13 |
Blue-chip stocks (SPY) are trading 4.6% above Friday's close, and Treasury long-term bonds (TLT) are 2.6% below.
Now the vinegar: All of that movement simply puts the prices within spitting distance of where they were when they opened on Thursday, before the computers ran riot in a mini-panic untouched by human hands.
So today so far is but a partial recovery of the Greek crisis losses: Significant, but not worthy of the Big Happy. Maybe, a touch of mini-joy to offset the mini-panic, at best.
The parabolic sar and Person's Proprietary Signal both showed a phase switch in TLT, to bear phase. However, those signals did not switch for SPY or the VIX.
The question is to what extent are any signals valid at this point, given the unidirectional news driven movement of the markets the past few trading days.
Technical analysis relies upon a shifting balance of widely diverse opinions regarding market prospects. When everyone is being driven in the same direction by eurofears, then I question to what extent the technicals can be relied on.
Martin Pring's detailed deconstruction of the economic cycle: What sorts stocks to look for at each stage of the recovery. A masterful analysis.
Skynet Panic of May 6
Panic Looks Like This
Skynet Panic Poisons Technical Tools
Indicator Exchange-Traded Fund Symbols:
EEM - emerging markets
EUR/USD - euro/dollar currency pair
GLD - gold
JNK - high-yield corporate bonds
SPY - blue-chip stocks
TLT - Treasury long-term bonds
USD/JPY - dollar/yen currency pair
USO - crude oil
VIX - fear index
Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic
About the glance: The colors indicate the state of each signal.
- trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
- adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
- psar, pps, macd: green for bull mode, red for bear
- sto: green for overbought, red for oversold, yellow for the neutral zone.
New to private trading? Here's a look at How to Become a Private Trader.
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