Wednesday, July 8, 2009

Intraday Update: Slew of ST buys possible at close.

RSI(2) buy on the S&P 500.

Looking back at the times when the VXO has closed above it's upper BB band - in the past 10 years, there were 90 occurrences, with 67 leading to higher S&P close within the next 5 days (74.44% odds). VXO is trading above it's upper bb today, but no guarantee that this setup will be triggered given that the market is trying to stage a turn around currently.

VIX RSI(5) is trading around 78 currently. In the past decade, on such occurrences, the S&P close higher within 5 days 72% of the time (70/97). In recent years, the performance has been even more impressive. From 2007 to today, this strategy would have resulted in positive returns 87.5% of the time.

Finally, the Equity Put/Call is spiking today. If the Equity Put/Call closes above 1.10, it will trigger yet another high probability play over the next 5 days.

Keep in mind these are very short term plays, as the intermediate term outlook remains down i believe.


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