We often consider volatility explosions to be signals and we think that today’s 250 points (268 range) are worth buying. So we did. We added on to our SPX (UPRO) and Q positions (QLD). We remarked a day or so ago on the bungee-like nature of recent markets. And before that on the bull trap when prices pierced the resistance line.
We have also remarked on the fraught nature of the present market position — with a formidable resistance line overhead and a broken short term trend line. Against that put a 2% plus day in the SPX, and an apparently improving economic situation. (Of course we ignore the latter.) Such a day ought to presage an end to the little downwave here — and in fact (though not illustrated here) this power bar breaks the short term downwave trendline.