SPY | VIX | OXY | SMH

As a follow-up to yesterday, we certainly didn't fill any gaps - which was somewhat predictable since the gap was above and beyond yesterday's trading range. Follow this link if you don't remember: http://blog.afraidtotrade.com/three-types-of-morning-openings/
That of course isn't real helpful to those who were holding positions overnight and got burned from the gap up - but unless you liquidate all of your positions every night there's not much that you can do about it. About the only thing you can do is play the odds that, after you've analyzed the gap, realize it's not likely to fill and adjust/repair your position accordingly.


<---- SPY










Here's a chart of the VIX. I'm not convinced that technical analysis can in anyway be applied to the VIX, for the fact that it has no underlying security that can be bought/sold but I still find the chart intriguing. Enough people follow it that there may be at least some sort of self-fulfilling prophecy thing going on.





I pointed OXY out a few days ago. I hope I wasn't the only one who completely missed the boat on this. Maybe I'll get another chance on a pullback toward 80.








I still like SMH as a longer-term play on a slight pullback - I'm especially fond of its angle of ascent. Securities that ascend at around a 30-45 degree angle won't make you rich over night but generally provide nice predictable directionality. Consider buying long-term calls (use tight stops under the trendline) or sell OTM put credit spreads below 27/28. Use caution around 32 - as last year's support will, at least temporarily, provide resistance.