Volatility is Increasing 6/12/13

Earlier I had posted that I saw a down signal on SPY and have withdrawn from the markets – closed my long positions. Yesterday I saw another down signal on SPY using my tested and tried slow changing system that is typically biased to the upside. Also notable is the down signal on the Advance – Decline line supporting the down signals on SPY, which is my proxy for the US markets. See charts below. My chart on volatility also shows an up signal indicating the Fear index is rising.

Needless to say, I see down signals on IIF, the India Fund, on EEM, Emerging markets, on TIP and TLT which are my proxy for the bond markets and in GLD which is the largest Gold ETF. Even the US dollar is back heading South. So one wonders, what if anything is going up?

Inverse funds are certainly rising. In addition I see UDN the inverse US dollar fund up. The Swiss Franc is looking strong, and that can be traded using FXY. I believe I will sit on the side lines for a while as I sit in a hotel room on business and hear about the Japanese markets dropping 5-6% tonight....

I am longer term bullish however. The US Shale oil production in North Dakota is going strong and we are heading to being the largest oil producer in the world. But for now, it is time to pause and let the retracement take place; without me in it…