VIX is creeping up again

VIX has turned around near the 19-20 zone and is creeping up again..

Tomorrow's important economic report

US Durable Goods Orders 

Feb 25 13:30

0.2%  Consensus

-1.2% Previous

The Durable Goods Orders measures, released by the US Census Bureau, the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, excluding the transport sector. As those durable products often involve large investments they are sensitive to the US economic situation. Generally speaking, a high reading is bullish for the USD, while a low reading is seen as Bearish.

Resistance above the 194 still strong

This is the 3rd time SPY retreated near the 194-195 zone. If this is nt a trap to lure-in all the bears and then move upwards, the downside would most likely be much more fast and furious. Key support right now is around 1910 - 1885. If that breaks then most likely things would unravel quite quickly to the downside and there would be a very high likelihood that the SPY will easily take out the recent low of 1810.

the 'Fed' was feeding the rally

Here is a former Dallas Fed President Richard Fisher appeared on CNBC in what may go down as one of the most candid interviews to date. Fisher explains that the intent of QE was to create a wealth effect whereby increased asset prices provided a catalyst to spend.

https://youtu.be/7nuzT3rchPU

Are we facing a 2008 like melt down in the markets?

Examining the chart below, it appears the market (SPY) is displaying a pattern similar to the year 2000 and 2008. First we can see a topping pattern, and we can also clearly see the candles getting longer, implying an increase in volatility as was evident on those other two occasions. If it turns out to be true I believe we could see the market drop to the 130 level on the SPY. When will the drop happen is not something either I or anyone else can predict.

SPY, where do we go from here?

If bulls can keep the upward momentum we can see 190 - 194 zone and then see another round of selling continue that will take us to new lows..

Trader's Tax deduction rules

Something I found on MSN, pertaining to trading and tax rules. (below is an excerpt from the article that is related to trading rules).

"Those who trade in securities have significant tax advantages compared with investors. The expenses of traders are fully deductible and are reported on Schedule C (investors report their expenses as a miscellaneous itemized deduction on Schedule A, subject to an offset of 2% of adjusted gross income), and traders’ profits are exempt from self-employment tax. Losses of traders who make a special section 475(f) election are fully deductible and are treated as ordinary losses that aren’t subject to the $3,000 cap on capital losses. And there are other tax benefits.
But to qualify as a trader, you must buy and sell securities frequently and look to make money on short-term swings in prices. And the trading activities must be continuous. This is different from an investor, who profits mainly on long-term appreciation and dividends. Investors hold their securities for longer periods and sell much less often than traders.
The IRS knows that many filers who report trading losses or expenses on Schedule C are actually investors. So it’s pulling returns and checking to see that the taxpayer meets all of the rules to qualify as a bona fide trader"

Here is the link to the msn article: http://www.msn.com/en-us/money/taxes/16-tax-audit-red-flags/ss-BBnip0E?ocid=mailsignout#image=14

We should see a bounce from this level

As contrary to my earlier belief that we are moving down to the 170 level, today SPY touched the Jan 20th lows of 181.4 and bounced back from there. Now it will be interesting to see if this up move lasts for a few days and overcome the resistances at 187, 190, 194 and 200. I think we might see a move to the 187 level and then back down further to new lows but it is just my guess.

Should we see a final push lower now

SPY fell below a major support of 187 today. Sometime this week I think we could see a re-test of the Jan lows of 181 and below is a support zone near 174. With VIX at the elevated levels (currently @26) market volatility is going to be high and market moves will be erratic and large until volatility dies down.

Employment numbers coming out this FRIDAY, FEB 05

These two important reports coming out on Friday will move the markets one way or the other. This time these numbers are suppose to be watched more closely then in the previous months.

13:30 USD Nonfarm Payrolls (Jan)

13:30 USD Unemployment Rate (Jan)3

     (Consensus  5% Previous 5%)

The VIX Key

Different levels to watch for VIX. Something I found necessary to watch while I am trading.

US oil drillers to report billions in 2015 losses

American oil and gas producers are expected to announce 2015 losses totaling over $15 billion:

Hess Corporation reported a net loss of $3 billion
Murphy Oil Corporation lost $2.27 billion
Chevron lost $588 million