It also could mean people are still mixed up. To use a sports analogy, all other things being equal the road team usually needs to execute a flawless game plan to win. In terms of recent challengers to one term Presidents, Reagan and Clinton ran great campaigns and defeated the incumbent. If this election is about the economy the GOP spend an inordinate amount of time focusing on social issues like abortion and immigration. Their whole first day was about their platform. Experts thought the platform would excuse instances of forcible rape but the GOP stayed true to their long term roots on that issue. The GOP guest speaker was none other than Dirty Harry himself. Romney’s cause was not helped by an improvisation that lent itself better to the Oscars extravaganza as opposed to the Republican convention. The Dems guest speaker is none other than Sandra Fluke who was made the poster girl for contraception and women’s rights. Normally it would be fluke to think this girl would stand a chance against a great American icon but this is no ordinary Fluke. The GOP gave the Dems an opening, they should exploit it this week.
On the slowest market week of the year, thank goodness for some controversy!
If there’s anything good that came out of last week was the rise in the VIX. With a market that didn’t fall very much, the VIX was consistently up all week. That’s a good thing and maybe a great thing. If this were to continue we could see a market that didn’t drop very much with a VIX that could be over 30 in a month from now.
I’m not sure what options players are afraid of but the higher this goes the greater the chance we have of putting in a low when the time windows start hitting about a month from now.
By the way, a little strategy play which is what we teach clients. I’m putting it in because it’s a textbook lesson. When we get near lows and the chart bounces and then FAILS POLARITY the higher probability is it takes out the prior low. In this case the Greenback did just that even as it retested the little polarity another time. It would not budge above it. The Dollar is trying to find a low here, lets see what happens.