It’s The Same Old Song - June 21, 2012

The IWM robot is staying in cash. The IWM correlation score was unchanged. The CBOE future implied correlation index fell into stock-picking ground. VIX dropped a lot into complacency land, indicating that funds did cover their hedges with no heavy selling or buying of new shares (flat 20 DMF and apathetic cumTICK) meaning that they are bullish. The 50-day moving average is now flat and above a rising 200 dma. POMO liquidity from Fed’s buying operations will be high today and will provide funds for fresh buys into a pullback. Next week has a windows-dressing bullish bias. “Com’on Let’s Twist Again” is back on top of the US charts and “Unforgettable” remains on top of the European charts.

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The GDX is still advising a new short position today at a limit of 47.01. At the risk of repeating myself like an old broken record, multi-pivot analysis will only favor aggressive short positions if the Yearly and Semester S1 (44.77) are decisively broken. Semester S1 will only change at the end of next week and we’ll try to anticipate what the new support/resistance strengths will be before the end of week/month/quarter/semester and in relevant time.
Billy
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