8 replies to this topic

[dcengr]

Ya i hear people buying dips. Maybe the bulls are right, but something tells me you need some fear first. Shoot nothing in media either. Tomorrow we see. Seems a lot of bears are stunned that we're actually getting a meltdown like the kind a few of us have been predicting for a while. Btw I still predict gap down and run tomorrow. So far, big [bleeep] gap down seems to be on track.

Edited by dcengr, 05 March 2007 - 12:34 AM.

[raleigh]

Btw I still predict gap down and run tomorrow ?run? you mean more down from the gap bottom?

[dcengr]

Btw I still predict gap down and run tomorrow

?run? you mean more down from the gap bottom?

Yes, a gap that doesn't fill. Stops will be run as soon as it opens, and it will just melt down from there.

You want to see what happens when gigantic futures positions get overrun? Perhaps you'll see it tomorrow.

Its all a FF ofcourse.

[Russ]

As I just told Teaparty on the other string it looks like his stop was .50 too high on the March sp emini - he came very close to nailing it, it looks like a double bottom on the 5 minute chart after a volume capitulation. R

Btw I still predict gap down and run tomorrow

?run? you mean more down from the gap bottom?

Yes, a gap that doesn't fill. Stops will be run as soon as it opens, and it will just melt down from there.

You want to see what happens when gigantic futures positions get overrun? Perhaps you'll see it tomorrow.

Its all a FF ofcourse.

[Russ]

BTW...how do you measure fear?

[arbman]

No fear? What the heck are you talking about? The amount of money spent on the puts last week was around $7B, to give you some scale, the money spent for the week of July 14th low was about $4.5B. This was the first week of the decline btw. The 2001, 2002, 2003 lows hardly exceeded $1.5-2B per week. No! There is serious hedging or downside positioning, the volumes are huge, there is absolutely fear in the VIX too, it is just not in the financial media, they are probably afraid the people will run to the banks... - kisa

Edited by kisacik, 05 March 2007 - 02:15 AM.

[CLK]

Big money can't dump size in the overnight session.

[OEXCHAOS]

No fear? What the heck are you talking about?

The amount of money spent on the puts last week was around $7B, to give you some scale, the money spent for the week of July 14th low was about $4.5B. This was the first week of the decline btw. The 2001, 2002, 2003 lows hardly exceeded $1.5-2B per week.

No! There is serious hedging or downside positioning, the volumes are huge, there is absolutely fear in the VIX too, it is just not in the financial media, they are probably afraid the people will run to the banks...

- kisa

Kisa,

My read is that the options data aren't reflecting real fear, just pragmatic positioning by big options players.

The VIX is high, but it should be. It's not a fear measure, it's a volatility measure and we have seen high volatility. Now, high volatility makes for very appealing put sales so at some point we're likely to bounce.

The Relative VIX is getting to Buy territory, but it can certainly go higher. I think we'll see much more Bearishness in the hedge fund sector before a really good low.

Mark

[arbman]

Mark, I didn't say, but the call purchases are also at the record territory. In any case, these positions are huge, just huge so are the volumes. I don't think this is all mechanical selling, there is definitely sell now and think later attitude at the moment. So, there must be some fear attached to it. On a bearish note, the net calls in the option data actually dipped to 9M net calls last week and quickly bounced back over 10M net calls. In that sense, yes I don't think we have the fear to make an IT bottom since there sure seems to be the long term mentality among the majority of the participants to make sure they will not miss the reversal to the new highs... My read is there is enough fear, otherwise we should not even get this bounce. But there is not much change in the fundamentals or in the speculation to make an IT bottom for any higher highs yet... - kisa