In retrospect, determining the end of the POMO effect did not require any additional indicators than price. The POMO oscillator has now reached its all-POMO-on low. There is some reason to suspect we may get a bounce in equities next week, being OpEx and playing for max pain, but the Bullish% and TLT are telegraphing that the end of POMO, coincidentally timed with the lowest negative economic surprise index readings since 2009, herald the return of the long beta-blockers / short dexadrine convergence trade:
and a link to the same:
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=2&mn=0&dy=0&id=p96249539740
CESIUS:IND, via Bloomberg:
and its link: http://www.bloomberg.com/apps/quote?...SIUS:IND#chart
In closing, a POMO-effect thought experiment. The descent since May 2 has been remarkably controlled. In a highly simplified variation of Bob's Reverse VWAP, imagine what the SPX chart would look like if the last buyers in were the first sellers out. Here is a non-technical imagery experiment showing the SPX from 9/1/2010 to 5/2/2011, but mirror-inverted. Overlaying it, is the SPX in regular time sequence since May 2, slightly elevated in the vertical to make the candles visible.
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Originally Posted by Ellis Wyatt
