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Wednesday, April 27, 2011

The Moment of "Truth" has arrived...

Here's how the VIX closed the day relative to the Monthly, Weekly & Daily charts (Hint: right-click on each link to open a chart in a new window):




Here's how YM, ES, NQ & TF closed the day relative to the Monthly, Weekly & Daily charts:




With today's breakout on the Daily charts (post-Fed meeting results) on YM, ES & NQ (however, TF failed to break its last swing high), and the Fed's decision to keep rates unchanged, it would appear that the markets have been given the blessing to make their way back up to at least the 2007 highs unhindered (NQ is already there & TF hasn't far to go), while allowing the VIX to fall to its 2007 lows. Perhaps when the VIX has reached those levels, it will stabilize. As a first-stage confirmation of this potential scenario, I'll look to see if the breakout levels on the 3 e-minis can hold in the near-term and whether the TF will follow suit. On an intraday basis, extreme bullishness tomorrow would be confirmed to me by tomorrow's Daily PP's (dotted pink horizontal line) holding as support as shown on the 60 min charts, with price continuing upwards from there and a closure over today's highs:


It also seems that the Fed is ignoring what the NKD is doing...until another future disaster possibly occurs in Japan. After the earthquake, the YM, ES, NQ & TF basically traded identically to NKD, but the recovery of the NKD has not taken place to the same degree: