Hey Market Pilot,
Over the weekend I filmed my weekly video review for my Moxie IndicatorTM members. In that video I explained to them how the landscape of the market right now is looking a little dicey. I am seeing new highs, breakouts, and earnings pops get sold into. Uptrends seem to be hitting brick walls and structure just keeps fading. The indexes themselves appear to be masking the deterioration underneath and so it has been difficult to discern what is really going on.
One metric I like to use is the UVXY which is the leveraged ETF of the volatility index (VIX). Oftentimes it can give me a clue or a heads up about the market before the market does. The most recent situation was when UVXY broke a multi-week basing level of $27.50 on August 5. The fact that it broke out to the downside indicated to me that the market should be good, which it generally has been. But the indexes really didn’t move in an energetic way despite the UVXY falling.
So now that the UVXY is starting to get into the oversold area, and the markets didn’t really exude strength, I am concerned that the UVXY is starting to flash signs of reversing or bouncing and that that will put a lot of pressure on the markets.
Things seem precarious out there and I haven’t found much to be excited about for a few weeks.
Your Profit Pilot, TG