10/20 - Market Analysis

SPX
- nearing resistance
- good time to tighten stops and some take profits


NDX
- a bit farther to resistance as its been underperforming all other indexes
- rangebound looking


RKH
- our forward indicator still looks good for another rally


USO
- nice to see that USO is rising with SPX...makes for a more believable rally
- watch out for the resistance
- not yet a buy until we close above the channel


VIX
- dropped huge
- killed options premiums in both calls and puts
- good measured move is a long ways away...i expect to reach there before next wednesday

QQQQ nov calls
- horrible...u could have made more money with stocks...rediculous!
- do yourself a favor and buy stocks...
- watch the puts how much harder they got hit as they got screwed with both and IV

RIO nov options
- same thing here on of the most liquid stocks around
- RIO rose 12.46%...options sure don't reflect it...
- watch the puts how much harder they got hit as they got screwed with both and IV


A/D
- advance / declining issues made good numbers
- BUT nyse up/down volume ratio and new lows are very bearish compared to the rally
- not looking like this rally can sustain...


Analysis: many signs point to a possible day or two left in this rally but it will inevitably fail back to area of support...most bullish sign i see is USO and its ability to participate in this rally...looking at the sectors, every sector participated..very widespread rally...seems to be real buyers getting back in...just seems to be slightly premature for many of the ppl on the sidelines...i wouldn't short just yet but i would be conscious of targets and area of price in which to take profits...

Sectors
best - xme, xle, oih , gdx, kol (9-14% gains)
worst - ung, xrt, uup, rkh, gld, hhh (-1.56% for ung)

* overall, ung was the only declining ETF...very surprising to see the strength in GDX with GLD being an underperformer...i guess the strength in XME got the better of the traders...