Sign that top is in....
#1
Posted 05 May 2007 - 08:04 AM
#2
Posted 05 May 2007 - 08:27 AM
#3
Posted 05 May 2007 - 08:38 AM
Can you provide a link ?
JULY 2007 139 PUTS LINK
http://www.cboe.com/...ticker=DJY SI-E
JUNE 2007 139 PUTS LINK
http://www.cboe.com/...ticker=DJY RI-E
Also note that deep in the money calls have about $2 premium in June and July. As I said, looks like the bets are one sided just like May 2006.
#4
Posted 05 May 2007 - 08:57 AM
Can you provide a link ?
JULY 2007 139 PUTS LINK
http://www.cboe.com/...ticker=DJY SI-E
JUNE 2007 139 PUTS LINK
http://www.cboe.com/...ticker=DJY RI-E
Also note that deep in the money calls have about $2 premium in June and July. As I said, looks like the bets are one sided just like May 2006.
Interesting. Thanks.
#5
Posted 05 May 2007 - 10:25 AM
Great post. Thanks.In early May 2006, I gobbled up some cheap DJX puts and made a pretty penny. That event seems to be repeating itself. If you look at deep in the money DJX puts such as the July 2007 139s. You can buy them for about a $.40 discount to the intrensic value. In fact, the July 2007 puts are cheaper than the June 2007 puts. Not supposed to work that way.
To me that indicates that all the money is on one side of the market. With bulls all in and shorts afraid to short, appears to me that the top is in place.
History usually repeats.
I'm a little reluctant here to use historical options data to measure the current sentiment due
to the recent SEC margin requirement changes (and the flood of newly printed money) the equation changes a bit; Not to say that your analysis is incorrect just that I'm reluctant to weight the data heavily.
#6
Posted 05 May 2007 - 12:22 PM
#7
Posted 06 May 2007 - 01:24 AM
Edited by wyocowboy, 06 May 2007 - 01:25 AM.
- Graffitti
#8
Posted 06 May 2007 - 08:30 AM
#9
Posted 06 May 2007 - 03:35 PM
Bob Hoye of Institutional Advisors on April 27th:
"Stock Market: The huge zoom that prompted a cluster of "upside exhaustion" readings in February continues to be the salient feature. These readings had not been seen since 1Q 2000, which then suggested the possibility of a cyclical peak for the stock market.
The next steps in the pattern would be the initial plunge followed by a vigorous rebound to test the highs. It was noted that on the positive side this would be accompanied by strong commodities resulting in a vigorous culmination.
As observed last week, because this was coming in close to schedule it could be called "rational exuberance". The Dow rally from 12,243 on March 28 amounted to 548 points with gains being made on 12 out of 13 trading days. Nearterm momentum is close to the point that typically ends a rally.
Of interest is that the dollar index is approaching the equivalent oversold condition.
Overall it looks like the stock market is accomplishing a critical test of the February extravaganza, as the dollar is approaching the most significant low since late 2004. This makes sense as it is being accompanied by a significant low for gold's real price, and its worth adding - a possibly significant low for real long corporate interest rates.
On the big schedule the exuberance is flourishing within the window when the yield curve does the big denial usually found at the ending stages of a bull market. Typically the bull will run some 12 to 16 months against an inverted yield curve. February was month 12 and the curve has turned from maximum inversion at -15 bps in February to around 0 bps.
Often the transition to steepening marks the beginning of the postboom contraction. This pattern prevailed when central bankers were employed to maintain the gold reserve backing the currency until the central banks were corrupted by financial adventurers with reckless notions about a centrallyplanned economy.
In so many words, the inversion with a boom, and subsequent steepening is not policy-induced so there is little to be gained by "watching the Fed".
What's more we are likely at the time when there is little to be gained by watching the orthodox economic measures as well as each week's breathless anticipation of such announcements.
Market history records that there is a cycle for business activity, a cycle for credit expansion and then there is a cycle for share certificates.
Now this may be very oldfashioned, but the advantage of watching the behaviour of stock certificates is that at cyclical peaks they usually lead the business cycle by about 10 to 12 months.
This, along with central bankers chronically being some 3 to 4 months behind cyclical changes in shortdated market rates of interest suggests little to be gained from obsessing about Fed utterances.
The important thing is to appreciate when market forces will curb policymakers' compulsions to utter credit.
The advice was to lighten up as this rebound and test became exuberant."
"In order to master the markets, you must first master yourself" ... JP Morgan
"Most people lose money because they cannot admit they are wrong"... Martin Armstrong
http://marketvisions.blogspot.com/
#10
Posted 06 May 2007 - 05:29 PM
In early May 2006, I gobbled up some cheap DJX puts and made a pretty penny. That event seems to be repeating itself. If you look at deep in the money DJX puts such as the July 2007 139s. You can buy them for about a $.40 discount to the intrensic value. In fact, the July 2007 puts are cheaper than the June 2007 puts. Not supposed to work that way.
To me that indicates that all the money is on one side of the market. With bulls all in and shorts afraid to short, appears to me that the top is in place.
History usually repeats.
Youve been spot on so far way sway now