Market Condition: Neutral to Slightly Bullish

Posted on June 3, 2011 by admin
  • ChartAdvisor.com: cautious (bearish). “There are times when it is better to reduce exposure to the markets and wait patiently for the markets to give you an opportunity. This is likely one of those times.”
  • SchaffersorsResearch.com: this week’s Outlook actually rings a more bullish tone than the last week, as exemplified by this statement “..the bulls could have the upper hand during the next couple of weeks”.  The risk of markets going down further remains, albeit of a lower probability (“A major breach of these strikes — a lower-probability scenario, but certainly a possibility — would lead to accelerated selling in the short term, as shorting of futures would pick up considerably, potentially creating a cascade down to 1,250-1,260 on the SPX, which would be its breakeven point for 2011.).
  • Vix: 16 and 20 are two important #s to watch (SchaeffersResearch.com).  When VIX goes below 16, the market tends to fall (“sub-16 readings have spelled short-term trouble for the market”).  ‘At the same time, for most of 2011 — with the exception being March — the 20 area has marked buying opportunities”.  VIX is 17.85 now and was 19.85 last Friday morning.

About admin

Richard Cheng, M.D., Ph.D., is an avid Wall Street investor with 20+ years of investing experience. He is specially adept at observing the world to find the patterns and then design strategies to win his battle. Most, if not all, happenings in the world, follow certain patterns. These patterns may be complex, multi-factorial, not so intuitive at the first glance, or even may appear chaotic. However, even chaos has its own patterns. If you pay attention and be patient, you'll find them and then you will gain an upper hand in your battle. Using this blog space, he documents his trades and his thoughts as they happen. He uses this blog as a a notebook to help him better refine his strategies. Hopefully this will help you as well. Good luck in your trading.
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