BigTrends

Looks like the markets are under pressure again on Monday - will it be another low risk entry?

The CBOE Volatility Index closed around 40.39 today, continuing its recent 40 to 45 range.  The interesting thing is that the VIX dropped despite the major indices being down over 2% today, which is unusual.  Some of this may have to do with low volume over the past 3 trading days and the market being closed Friday for a holiday.  But it also possibly indicates that the Market Makers may want to bring the VIX down below 40 (possibly to a new 35 to 40) range, as we approach the summer months.

Next week earnings reporting season begins in earnest.  Many pundits have expressed the belief that poor earnings outlooks could be the catalyst for another leg down in the markets.

Yesterday's SPX close gave us a very nice confirmed bullish Percent R re-test on the Daily Chart. It also had a successful test of key middle levels on the Hourly Chart. If you are using charting software, we utilize different inputs, levels, techniques on our Percent R analysis than are the defaults on most programs -- BigTrends founder Price Headley and others in our firm have developed methods for smoothing out and utilizing Williams Percent R that are not really being used by anyone else that I'm aware of. And the nice thing about this indicator is that it can often be a "leading indicator" as opposed to a lagging one, which is basically the "Holy Grail" of most technical analysis.

Quick thought: 850 coming on SPX, will 900 be tested soon or do we pull back into a range?

I've been wondering what the short- and long-term effects are going to be of the massive slashing of consumer credit card limits. I'm seeing evidence of this occurring everywhere but would like to see more numbers and specifics about what each credit card issuer is doing and has done. To some degree it obviously will be dampen consumer spending in the short run, but in the long run it may make a more savings-driven, less over-extended U.S. consumer. Interesting that I view this as a possible short-term negative with possible long-term positive results ... yet I view the Fed's and government's money printing as short-term positive but likely long-term negative.

Position: How are they going to buy those 60-inch LCDs?