Kind sir please stop this macabre merry-go-round so good ole Keystone can get off and rest his bones on the park bench. What has the market become? According to the CPC and VIX, trader's no longer fear or worry over the broad indexes, they know the markets will go up so they are net long in every account, holding long positions in any ticker you can throw a dart at, it does not matter since everything will go up. This is a very interesting market period. The CPC is showing positive divergence, it is ready to bounce, and, considering the new low 0.68 print, the CPC may have very well identified the top in the broad markets today. If not, it is very very near. Trading will likely beome extremely interesting moving forward. All long positions should have already been thought out in reference to owning them, or not, moving forward into what has potential to be, a very strong market sell off. There is probably very little time remaining to make a decision. The projection is for a strong downward move in the markets at any time. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
the fact that the market has gone up, and then up, for the last several months I think is enough evidence that a top has formed. No?
ReplyDeleteKS and Arnie, could it be that the new normal in these QE markets is for this ratio to be below 0.5 to represent a top and 1.0 to represent a bottom? With such low short interests in the market these days, will this thing ever roll over before the election? I think repubs need to flush this thing down to 1100 to give romney a chance.
ReplyDeleteSteve
Anon, QE or not readings like KS show here represent total complacency. Oh the market can stay complacent and irrational longer than you think/can stay solvent. But if everybody is long then there is nobody left to buy... And the market needs buyers to drive prices up. Plain and simple. Now there are thus only sellers left.
ReplyDeleteChina PMI shows again contraction, though up a smidgen from last month, but below 50 is contraction regardless and that's what matters. Not if it contracts a tiny bit less. The futures already responded to that news negatively.
From an EWT perspective, today may have been a failed 5th of a 5th wave. And a higher degree 4th wave, even a big B wave may now play out. If 1456 breaks then next level is 1440. If that breaks 1420s. Let's see what tomorrow brings. I am short (SDS) since 1470 and with a stop loss at 1475, just above Friday's high of 1474.
Keybot is short too, so I am feeling confident it's the ride side of the trade for now.
Friday with the bigger volume then Thursday could have been a capitulation day where even the bearest bear of bears went long... The slow slide down can be a below the water line institutional selling to future bag holders. But wouldn't read too much into that.
The complacency is rampant right now. Spain remains wishy washy on the bailout so this adds to market weakness. With everyone all in on the long side it does create an elevated cloud where there tends to be quite a bit of air underneath. Interesting days are ahead. If Spain takes a bailout the markets will likely test and print the 1475+, otherwise, markets leak lower. Futures are red overnight into this morning (Thursday) but not drastically negative. Watch SOX 395.50 closely after the opening bell, the semiconductors in general.
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