Friday, October 10, 2014


This is turning scary.  The market feels like it has no bottom.  The VIX is shooting through the roof, blasting through 20 with ease, closing at 21.24.  That is the highest VIX close since February 3, when we closed at 21.44.  That happened to be the bottom of that selloff.  In 2013, we got as high as 21.91 on the VIX during the taper tantrum.

I have a long ES position, underwater.  Today's action feels capitulatory, but we'll have to see how traders react to these levels on Monday.  Around SPX 1900, we are near the August lows, so there will be some natural dip buyers in that area.  We also have strong support in the SPX 1880-1890 area.

After the cash close, we got a further dump in the S&P futures, which strongly indicates panic hedging into the weekend after a nasty down day.  Close to a bottom, but I may be off by 20 points.  Definitely not a time to get too aggressive, either long or short.

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