The last few times the utilities hit so far for so long out in the standard deviations of their monthly and quarterly averages, the SPX significantly declined the next month. The last few times the USD stayed so far for so long in terms of the standard deviations from its long term averages, the market significantly declined. The last time the growth and the value diverged so far for so long in terms of the standard deviations from their long term moving averages, the market had the significant corrections.
This is not an uptrend, there is nothing supporting this market other than the short interest, the decline in Feb was an initiation, no significant market rally can start with this kind of leadership, deteriorating breath and liquidity picture from the bonds, credit assets or currencies, declining net interest in the options and futures and even Fed.
This market has months to go in order to start a new intermediate term rally, perhaps more of a trading range first for the next few weeks (test of the gaps etc), but eventually more declines, much more declines...
- kisa
Short interest in futures and options aside
Started by
arbman
, Mar 31 2007 12:43 PM
1 reply to this topic
#2
arbman
-
- Traders-Talk User
- 19,504 posts
Quant
Posted 01 April 2007 - 12:59 AM
The distortions in the put buying can go the other way, just like the call buying. This options market is not what it used to be, then look at the 2001 market decline, if there is something really wrong --that's yet to come out--, this much put buying doesn't mean anything.
Yet, I also think that the market will move closer to the gap or perhaps beyond and it might set up a bullish sentiment until the next low. As I said posted above, the only thing that really appears to be holding this market up at the moment is the bearish speculation, but it doesn't have to be enough all by itself...
I have a very simple strategy for a possible vertical up rally, go short in the growth stocks gradually (NDX and others) for the late spring and summer contracts and keep some longs in the utils and energy only as a hedge in the front month. I am looking to get fully short by the end of April, I hope a strong rally comes sooner than later. I think this will look like March 2005 in the worst case...
- kisa
Yet, I also think that the market will move closer to the gap or perhaps beyond and it might set up a bullish sentiment until the next low. As I said posted above, the only thing that really appears to be holding this market up at the moment is the bearish speculation, but it doesn't have to be enough all by itself...
I have a very simple strategy for a possible vertical up rally, go short in the growth stocks gradually (NDX and others) for the late spring and summer contracts and keep some longs in the utils and energy only as a hedge in the front month. I am looking to get fully short by the end of April, I hope a strong rally comes sooner than later. I think this will look like March 2005 in the worst case...
- kisa
Edited by kisacik, 01 April 2007 - 01:06 AM.
