49 replies to this topic

[12SPX]

So many interesting signals out there right now on the market, which is way overdone in my view based  just on call volume sentiment and how extreme it is.  I'm still holding my outright short from 7625 now with a profit stop of 7615 going into the cash open.  Also still holding my e-mini Wednesday sell of the 7650 calls which I would go short there to if needed, but they are over 50% profitable so may take them off and roll into Thursday at the close if we move up here.  The market needs to start being truly volatile to have a chance of not seeing a big sell off.  Healthy markets see consistent up and down moves not one directional as we work on our 9th week up. 

[12SPX]

Just saw this on X, very interesting statement..."When people say 'AI isn't a bubble because the technology isn't going away', it just shows they don't know what a bubble is. The internet didn't go away. Railways didn't go away. Tulips didn't go away. An asset can be overvalued, even if its useful."  Then of course the debate comes up if they are overvalued or not but what I see is just movement according to my expiration cycle research and the way I look at it from this past months expiration cycle from my newsletter is this:

 

The key question now is whether these incredibly expensive and overbought semiconductor stocks can continue carrying the major indices higher, or whether they pause and let volatility return.

 

The price action from March 2025 to today bears an eerie resemblance to the late-stage internet rally of 1999–2000. Using my Expiration Program Numbers, we appear to be in a market cycle equivalent to November 1999. That suggests roughly +5.5% of upside left for the S&P 500 (around the 8,000 level) if the current pattern holds. That target is achievable by year-end, but history shows the path would likely include much larger swings and a volatile consolidation phase — similar to what unfolded into the August 2000 peak.  Supporting this view, zero-day call options have essentially taken over the market. Prices on upside bets are extreme — in my 40 years following options, I’ve rarely seen sentiment this euphoric. This is closer to gambling than investing, and it’s a major warning sign.

 

We’ve also just completed the 9th straight up week — one of only three such streaks since 1990. The strongest comparable recovery (post-2009) came after the market had already been cut in half. A +20% rebound from more modest lows feels extended. In prior cases, these streaks were followed by sharp increases in volatility.

 

With Iran tensions persisting, inflation reaccelerating, economic data softening, and midterm elections approaching in November, there is no shortage of potential catalysts. History doesn’t repeat, but it often rhymes. I believe we are approaching an intermediate top. The market needs time to digest these massive gains, and a period of consolidation and higher volatility is likely ahead.

 

[andr99]

So many interesting signals out there right now on the market, which is way overdone in my view based  just on call volume sentiment and how extreme it is.  I'm still holding my outright short from 7625 now with a profit stop of 7615 going into the cash open.  Also still holding my e-mini Wednesday sell of the 7650 calls which I would go short there to if needed, but they are over 50% profitable so may take them off and roll into Thursday at the close if we move up here.  The market needs to start being truly volatile to have a chance of not seeing a big sell off.  Healthy markets see consistent up and down moves not one directional as we work on our 9th week up. 

 

no, my friend, if you are waiting for a sell off, I think you won't have any. This market has a long way to go before topping again. In any case I respect your point of view. 

[12SPX]

Just pointing out I didn't say a top top.  As I said at the start of the year we could see the market up for the year but just not big.  8000 isn't that far away so even though I doubt it the SP500 could be up +15% by year end.  My main point about today is I believe we are going to see volatility actually begin so we could see the market fall a whopping -5, maybe even another -10% before a big year end ripping rally after the elections. 

[12SPX]

Btw I have no clue about Europe or Canada I'm just talking about the SPP500

[12SPX]

Taken out of my overall short on the e-mini for a 10 point profit wow lol!  Oh well I'll sell higher hopefully but have kept my 3 year win streak going lol!!  Sometimes I miss it but tired of sitting at the computer all day, way easier selling closer in options

[12SPX]

Okay, can't help myself as I'm sitting here so I'm reselling the e-mini here at 7622 lol! 

[andr99]

....I doubt it the SP500 could be up +15% by year end.  My main point about today is I believe we are going to see volatility actually begin so we could see the market fall a whopping -5, maybe even another -10% before a big year end ripping rally after the elections. 

 

well, we have different expectations. I don't expect the spx to turn down before 8800-9000 is reached and I don't expect any 10% correction before elections, but again, I respect your opinion.

[12SPX]

And just like that, I'm back to an average short of 7625, I'll sit on this one now for awhile....

[12SPX]

 

....I doubt it the SP500 could be up +15% by year end.  My main point about today is I believe we are going to see volatility actually begin so we could see the market fall a whopping -5, maybe even another -10% before a big year end ripping rally after the elections. 

 

well, we have different expectations. I don't expect the spx to turn down before 8800-9000 is reached and I don't expect any 10% correction before elections, but again, I respect your opinion.

 

I guess were back to the start of the year where I said there was going to be a correction and you were bullish then.  Remember I was saying it would be better to be in bonds for awhile.  Were in the same thing now, way overdone and I prefer to trade like when I said the market was pretty oversold when I was selling expensive puts end of March!!  Now I'm selling expensive calls like in January!