Yet the VIX indicates that everything is relatively clam. So could this be signaling a lack of selling pressure and fear in the market and a bottom? Has this decline been lead by a lack of buyers not heavy selling? Or could is there still selling pressure out there, that hasn't hit the market yet?
Another indicator is $TNX, normally when the market is falling $TNX follows the market down as there is a flight to safety; as investor pile into bonds, sending yields down. Since early February's, $TNX has been moving up, showing there was a selling of bonds. $TNX also looks to be forming a double top. So this could signal more downside if $TNX starts to fall.
This leaves the market with a few questions.
Are the Bondie's trying to tell us something about where interest rates will be heading soon? A rise in interest rates would be harmful to these markets.
Where are people going with their money if they aren't buy securities and they aren't buying bonds?
Or are these rise in interest rates the product of the govt selling bonds to raise money for all the debt sorry "Credit" they will be pumping into the economy?
Another indicator that is off is $TRIN, is has hardly reached panic selling levels or stay above 2.00 during the last couple of days.
Personally I think these charts are indicating that there is still some downside left to this leg. There is a lack of fear in the market, bottoms are not formed when there is complacency in the market. The VIX is sitting on its trend line and looks like it wants to bounce off and run up.
Also investors have not piled into bonds as a safe heaven for their money.
So to me this says that there is still money in market that has not ran for the hills, so the potential for a sell off is slightly greater then a rally. For a rally more money would have to come into the market, with the latest news out and the levels we are at I don't see that happening.
I'd love to hear some of your guy's comments on the questions I raised too.
The market is at a confusing point, we will have some significant economic data this week as well. So it won't be long for the market to pick its direction. Futures are down 5.00 as I type this. Should be a fun week!
