2 replies to this topic

[dcengr]

Yes that's right... S&P futures are positioned too bearish, the Nasdaq futures are positioned too bullish... And relative strength of Nasdaq vs S&P has hit some ungodly level... Sorry folks trying to clear this up, but my best guess at the moment is that this imbalance has to work its way through the system somehow.. I'm not sure how it'll do it, though. Whether SPX moves up and NDX moves up less or SPX moves down and NDX moves down more... I have no clue.. I do know it is highly imbalanced.. its possible there's action like 2000 where you get big dips and on come backs, the NDX just doesn't bounce back up or vice versa.. The imbalance is huge... I'll see if I can post charts later. Then there's the matter of the gigantic derivatives bet the small guys were making last week.. tomorrow we can see what they did this week... I'm going to guess its all concentrated in the tech sector tho, mainly because I haven't seen so many large cap P/E 100 stocks in oh 7 years or so.

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Edited by ..., 20 October 2007 - 07:37 AM.

[dcengr]

The following 3 charts illustrate the futures positions of nasdaq (ND, NQ). The dollar values are calculated by multiplying the appropriate contract by 50xindex value or 250xindex value and summing them up.

1) first chart just shows position by category
2) second chart sums positions of large+small traders vs commercials
3) third chart shows how many traders are carrying net long vs net short as a bull %





And S&P data..




My best guess is that people are all long Nasdaq, short S&P at this point.. a very gross imbalance that needs to be corrected.

Edited by dcengr, 20 October 2007 - 11:14 AM.