THE PICTURES

If you look closely, well maybe not that closely, you will see the VIX and the SPY and their correlation. The talking heads are giving us all kinds of reason as to why the markets are not higher today. Inflation looked high on the morning report. Yesterday, the fed comments were less hawkish and the markets rallied and on Monday a fed guy said watch out for inflation. Trading on information like that is not fruitful in my opinion.

I like to trade on the numbers and those numbers are delineated above. Buy when the VIX is overbought and sell when it is oversold. Today it is still oversold and I intend to sell the balance of my ETF's on any afternoon ramp higher. I don't think that buying today, unless it is for a day trade, is a high probability trade.

The SPY Pivot was "touched" at 130.24 (actual pivot is 130.18) and any movement back to that area is probably an "intraday" buy. Initial SPY resistance is the 131.5 area and I doubt we see that area again today(premarket trade was close).

The 10 year Bond is back to 5.05% and it is bringing down the homies. The sectors outperforming are Brokers (JEF+6.5%), Semis(SMH+1%), Internets(HHH+3.25%) and of course the Oils(+1.5%). Not sure I understand the Oil situation with all the CNBC babble about supply and demand. I think all one needs to know is that BRIC countries will be consuming lots more oil in the future and supply is not expanding. What else does one need to know?