Okay some charts for you
Ugly but 280 held today so i think we go back over 300 and start base building. Also mommentum on this leg down was less than last week. Positive volume divergence.
Meanwhile its the Dow Diamonds chart (DIA) which is clearly oversold and overdue for some sort of reflex rally.
And Terra Nitrogen which i went long again in the upper 60s and closed near 74. Looks like 5 waves down with the 200 day moving average holding and well overdue for a few days upside and a trip to the upper 80s at the very least. Also made a new low for the move today but the selling pressue and volume diminished into the drop. Good reversal up close. I think we could get back to 89 day moving average just on a reflex. For this stock its not impossible. Also note that the 200 day moving average support has held in here and we have closed 3 points above it today.
Btw i use fibbonacci numbers for moving averages. I find they work well. 34,55,89,144 are the ones i use. And i use the 200 day because everyone else does.
Dow and S&P futures higher ahead of the asia session. Should be an interesting overnight session.
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1 comment:
the dynamics are unfortunately simple. the current vol in the mlp space is being caused by quant hf and multi-strat hedge funds that are selling anything liquid ie MLPS. a number of large multi strat hedgefunds have been caught in leveraged credit trades and are forced to sell anything liquid to meet margin calls.
its also important to note the recent importance of MLP dedicated funds that are also been forced to sell. GPS, Harvest, Swank, Strome, Income Trust, Kayne and several others. Many of these funds have attracted investors with the excellant performance from the past year. These investors are typically european performance chasers that will surely redeem when the bad numbers from this month are reported. There will also be mass redemptions with several of the best performing MLP hedge funds that will cause a further sell off.
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