3 replies to this topic

[selecto]

Speaking of low volume rallys, there's good news and bad news: Bad news is that you blew up; good news is that it was on low volume.

[arbman]

Selecto, look at the actual volume on $NDX, it is much better... It's just that the retail guys did not trade QQQQ today, they were waiting for it to turn around for the crash tomorrow probably...

[ogm]

Selecto, look at the actual volume on $NDX, it is much better...


It's just that the retail guys did not trade QQQQ today, they were waiting for it to turn around for the crash tomorrow probably...

Would you be surprized if this rally fails ?

[arbman]

Would you be surprized if this rally fails ?

I am not sure about the expiration week, if the boyz push another 20 NDX points, the retail call buying will go through the stratosphere. But how people should react after a pull back is totally another issue. I think the calls will get punished first. I think it will expire a little over NDX = 2000, Qs 49 call strike has a lot of open interest too. I saw some spreads sold on last Friday and Monday...

One can not be too bearish with this action. The leadership is changing from the internet to the semis now and from NYSE to Nasdaq. Nasdaq did not have much lows, but more highs, not the same on NYSE. So, the speculation is back to the markets and this is short term bullish from the liquidity perspective.

Another ratio that bothers me is the XLK:XLE ratio, the energy outperformed them all unlike in 2003, gold is up, it all means there is growth and inflation, but it can be the last bit of the excess liquidity flying to the speculative large caps, I've been suspecting so. Gold underperformed for a while now, but it did not quit. The money supply is not growing as fast as the last 2 years. The market has already had a large cap rally and the small caps are really left behind. So, it is hard to buy the 2003 like new growth wave argument before a correction and that correction will sure come after such blow offs and this will probably target the shorts...

Remember, the synthetic collateral is the short interest in the markets and the FCBs will use this to their advantage by printing more against them. The call speculation is the only resistance up there and you don't know how the retail will react to pull backs...

- kisa

Edited by kisacik, 12 July 2007 - 09:00 PM.