Date: September 2, 2010 2:39:17 PM EDT
The swing trade continues to bring modest gains: 11/14 positive trading days.
Yesterday stopped completely out of my SDS hedge, but I added it back this AM rally. New CMG, Added additional 1/4 VMW, BIDU. Long by weight: POT, SDS, VMW, BIDU, CRM, RDY, CLF, CMG, GMXR, KWK. 20% Cash; 20% short/hedged.
Now below, I (Ariel) am providing three charts. First, the $VIX dropped to test trendline support today. Like the 1090/1097 level in the $SPX, either this line will hold - or if it breaks, that'll be new information to use in shifting my point of view. Next is the McClellan Oscillator for the NYSE ($NYMO) and notice too that the longer-range Summation Index just tested its own 50-day moving average. The MO itself entered overbought territory so it must be watched for when it'll roll down again. Finally the TRIN - what a chart ... Its moving averages are mostly still oversold but its absolute value and 3-dma are much lower, even the TRIN itself ticked up today but under .80 so it doesn't necessarily aid the bulls. Well - let's allow the levels to decide for us. There are arguments on both sides but I'm with Brian in remaining defensive given this time frame (as I said, so many 401(k)'s so little time!) and these technical levels. Unless these levels break, the bears are still growling.