By Sell Puts
THe chart on the left of the SPY with a VIX overlay is unique because it highlights what happens at the end/beginning of quarters. Usually, per back tested data, there are periods of volatility surrounding EOQ. The window dressing trade appears to be very much in play whether the mainstream media will admit it or not. NOw having that thought fresh in your mind refer to the chart on the left. Look at the circles highlighting key pivot points where the VIX has touched the upward trending line. Each time this happens equities sharply reverse direction on high volatility. THe large red circle is the area of most concern, where the kiss of death is going to happen. The kiss of death is when the vix the 50 SMA and the end of the quarter collide. This will happen volume will pop volatility will allow for large block trades to be executed on the sell side. Then we are in for the ride back down to earth. Call me a pessimist, i am a realist and a chartist. The chart is telling me something very interesting is imminent.
LONG dollar
Short commodities/specifically OIL
Short equities
As July 1 approaches this trade will become much more clear to understand.
Drumbeat: June 2, 2012
5 hours ago
