The reality is that there is always a reason to be bullish and bearish–that’s what makes markets. What we must discern is where the best probabilities lie.
-Todd Harrison

Today, the equity markets staged a less than stellar attempt at displaying some sort of buying interest. Looking at a shorter term 60 minute chart of the S&P Futures, it is easy to see that we rallied in the context of a downtrend. Trends don’t move in straight lines. They ebb and they flow. I’d use today’s high as a stop with a target at about 622.

SP H9 60 Minute

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Silver is a bullish market.

The daily chart presents us with a great entry. Stop below Monday’s low. Small risks, big rewards. Stay Tuned. Trade the picture.

Peace

Silver

This is the story of a champion
Runners at the mark and they pop the gun
Stand up, Stand up
here he comes
Tell me what it takes to be #1
Tell me what it takes to be #1
-Kanye West

Below is a chart of the Volatility index ($VIX). The $VIX is up 5.12 as I write at 51.47. Watch for the $VIX to break out of the upper channel which I have highlighted on the chart.

The VIX

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In my last display of trader art, the 10 year (ZN M9) was stopped out.

The first attempt at entry did not work. The second attempt may work. Small risks for big rewards. That’s how we roll. When we Trade the Picture.

Peace

Trader Art 1/^+*

“All energy flows according to the whims of the great magnet.”
-Hunter S. Thompson

There he goes. One of God’s own prototypes. A high-powered mutant of some kind never even considered for mass production. Too weird to live, and too rare to die.
-Raoul Duke
Fear and Loathing in Las Vegas

There is lots of bad news hitting the futures this Sunday evening. American International Group (AIG) is being extended another 30 billion. What a joke. This is nothing but another attempt to resuscitate a patient that has clearly flat lined beyond any possible recovery. The mathematics are facing their implications in the world of AIG. On September 15th, the governor of New York said AIG is financially sound. Where is he now? This AIG news looks to be the catalyst for the next big move. Move which way? Move down in equities, but more importantly, move up in Volatility. Were you short the crash of 2008? Are you short for the crash of 2009?

Peace

Watchout

General Electric (GE) announced today what Volatility News announced on January 23rd. It’s official. The dividend has been cut. The silence of Moody’s is deafening. GE will lose it’s triple A rating. Stay Tuned.

Peace

My friends call me V

The credit markets look terribly weak. Especially high yield debt. Below is a chart of the SPDR Barclay High Yield Bond ETF (JNK).

SPDR Barclays Capital High Yield B (ETF) (NYSE)

The credit markets saw a rally the latter part of 2008. They have since faltered. Look for the credit markets to take out their lows from November. Then you’ll see the TED Spread zoom higher than it did last year. Guess what happens then? The $VIX goes even higher than it did in October of 2008.

Weekly chart of the VIX

That’s the thing about Volatility. You have to be positioned before the tipping point hits. If you are positioned before it hits, it is then that you can hit it big.

Peace

The Big Time