Fifteen-Minute Short

Sell signals on the $SPX 15-min chart have been working well lately. When slow stochastic, CCI or RSI rolls over with any of the others overbought, taking profit (SPY) or shorting has been profitable for six of the past nine signals:

Click image for full-size, updated charts.

Of course, it's important to remember two things:

1. When a signal has been working well for a while, it becomes the "obvious" trade--which means it probably won't keep working as well much longer.
2. No signal is right 100% of the time, so keeps stops tight if you're shorting--at or near the high of the previous bar.

We're Not Number One (in Healthcare)

Two disturbing, but not surprising, articles about healthcare in the United States:

• The US Has Some of the Worst Health Statistics in the Developed World  - on Business Insider, via Edward Harrison
• Americans 'are sicker and die younger' than people in other wealthy nations - from The Guardian, via Christian Democratic Socialism
• And directly from Mr. Harrison himself, The correlation between healthcare spending and life expectancy

The other characteristic that sets U.S. healthcare apart? A Byzantine network of private, for-profit health-insurance providers.

No News Is Good News

In the absence of anything particularly bad in today's jobs report, traders seem content to keep following the larger, bullish trend (reinforced by two additional up days after Monday's pullback):

Breadth is moderately bullish, and volume is running about average. Implied volatility, as measured by $VIX, has been about as tame as it gets--suggesting that the slow drift upward, punctuated with news-driven gaps here and there, remains on track for now. Still, I'm being careful not to take a strongly bullish bias with $SPX near the top of its seven-week rising channel.

Implied volatility in $SPX options favored selling January expiration against the February 8th weeklies this morning, but that arbitrage opportunity has pretty much vanished this afternoon. The best opportunities I see right now are in bullish Jan 17/Feb 1 calendar spreads and in Feb 14 butterflies and condors.

VIX in the New Regime

If we are entering a “new regime”, $VIX 15 is the level to sell/buy (VIX/SPX):

Implied Volatility "Regime Change"

An cautionary tale for mean-reversion fans, by "Martin T." via Pragmatic Capitalism: Long-Dated Volatilities--A Regime Change?