9 replies to this topic

[OEXCHAOS]

Only at 54. No signal. M

[arbman]

Kind of good for the bears, they missed these great OEX P/C discussions!

[Gary Smith]

I think sentiment is favorable here, especially the muted action of the Rydexers and the heavy short selling by the public vs. the NYSE Members, for a continued move up to Dow 13,000. I also see the much discussed OEX put/call ratios as bullish not bearish. I'll consider this an ill timed call, at least for the short term, if either the S&P or Dow has that elusive 2% decline from recent highs. I still think 13,000 will be a magnet, be that sooner as I expect, or later if we first correct 2%. Dow 13,000 could get a lot of hype with an accompanying rise in bullishness and then we might finally get that 2% Dow decline. But's let revisit sentiment at that point. Lately, it seems the higher we go, the more growls we hear from the bears.

[arbman]

Gary, fading you would be a mistake, but I would've aggreed that the data was misleading if the implied volatility on OEX did not increase, the last two daily highs were lower highs if adjusted by its implied volatility (VXO), same on DJI if adjusted by VXD since you seem to be tracking that index. GL...

[OEXCHAOS]

Gary, The bias is still up, clearly, and we don't have the type of sentiment "signature" that makes for any sort of important top, but many of the measures of sentiment that I use are showing the same types of Bullishness that marked the May top. What that says to me is that sentiment is NOT supportive, but, in fact, neutral for the most part. If we turn down for whatever reason, there's fuel for a decline, and if we don't, well, sentiment won't stop the advance (there's still fuel for that, too). Near term, there's also a cadre of shorts to squeeze, but they aren't that numerous and they don't ALWAYS bag the top pickers. In any case, that Bullish factor might only be good for a small, quick rally. What I have a problem with is your read of the OEX P/C. It was a hook in September, to be sure, but it was clear that it was a hook as you could see from all the other sentiment. This go round, you don't have that type of sentiment. If you look at all the past readings, I just don't see how any rational person can conclude that the high OEX 10-day is anything but Bearish. It's about as good a correlation as one gets in this game (small sample not withstanding). I'm not disagreeing with your position--in fact I deem it correct, but sentiment shouldn't be a major supporting factor. In fact, sentiment is a major supporting factor for what you will do, which is sell if the price action turns negative. In this case, if the price action does turn down and confirm, then it would be time to short, unlike any past pauses since July. Mark

[Vector]

personally I find the p/c ratios hard or sometimes unreliable to interpret.

one I like to use is the "don't fight this" indicator:

http://stockcharts.com/h-sc/ui?s=$NDX...id=p66611696428

it tells me what NOT to do, and right now that is = don't be short !

of course this time it'll be wrong

[OEXCHAOS]

V, there's nothing wrong with that. Really. What I'm saying is that for the first time in a long while, my indicators are saying, "IF we turn down, it's OK to short." We haven't turned down yet. We could, but I'm agnostic. I've got a short on, from a bit earlier (when things looked a bit worse), but I've got a close stop. I figure I'll just let the market tell me what to do. Mark

[Echo]

What is the T-4 threshold on "Is this the TOP" threads by itself? I count 5 threads in the last 24 hours alone.

[OEXCHAOS]

What is the T-4 threshold on "Is this the TOP" threads by itself? I count 5 threads in the last 24 hours alone.

We don't have one and I have no way of figuring htat out. It sure seems like folks are getting punchy, though. I have no idea what THAT means. I'm just glad we're not at each others throats.



Mark

[arbman]

Vector you are comparing apples to the oranges in imho, if you adjust the Qs with the implied volatility of the Qs, the picture is different... There is risk in the large caps now, the second high was a lower high than a few days ago and even lower than the January high...

http://stockcharts.com/c-sc/sc?s=$NDX:$QQV&p=D&yr=0&mn=6&dy=0&i=p66611696428&r=1564&.png http://stockcharts.com/c-sc/sc?s=$NDX:$VXN&p=D&yr=0&mn=6&dy=0&i=p66611696428&r=1564&.png

personally I find the p/c ratios hard or sometimes unreliable to interpret.

one I like to use is the "don't fight this" indicator:

http://stockcharts.com/h-sc/ui?s=$NDX...id=p66611696428

it tells me what NOT to do, and right now that is = don't be short !

of course this time it'll be wrong