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Post by ukarlewitz on Apr 6, 2010 22:39:31 GMT -5
The extremes of bullishness now are simply incredible. First, retail investor's allocation to bullish vs bearish funds: Second, the dumb money indicator: Courtesy of Cobra and Sentiment Trader.
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Post by ukarlewitz on Apr 6, 2010 22:46:35 GMT -5
CPCE (10ema) made another bigger low today as well. It's a falling knife.
What happens next will be interesting: the consensus view would be a tag of 1200-1220 and then a small retrace to 1170, 1150 on the outside.
Markets turn when the news is good. Is that 200dma calling?
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Post by Dualism on Apr 6, 2010 22:59:56 GMT -5
CBOE Options Equity Put/Call Ratio
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Post by Rich on Apr 6, 2010 23:08:22 GMT -5
It makes me want to hide under a rock.
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Post by Dualism on Apr 6, 2010 23:09:17 GMT -5
Put/Call ratio index with 5, 10, and 20 ema's: Weekly chart with 5 and 10 period ema's:
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Post by benvestor on Apr 7, 2010 14:27:00 GMT -5
Notice that the calls got extremely bullish right near the top in 08' I don't think we are that overvalued yet.. I am just maintaining some contrariness SPX 1240!! lol Welp we knew the pullback was a'comin. Those calls must have some pretty lows strike prices eh?
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Post by ask2lern on Apr 7, 2010 19:10:09 GMT -5
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Post by Dualism on Apr 7, 2010 20:10:37 GMT -5
NYMO fell below the 0-line. Feels for now we are ranged bound between -20 to +20.
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Post by Dualism on Apr 7, 2010 20:23:46 GMT -5
A comparison of FAS to DRN from the February cycle low:
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Post by Dualism on Apr 7, 2010 20:30:10 GMT -5
There is much more room for the put to call ratio to rise. Looks like an orderly start to a potential market pullback. Time will tell.
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Post by jack on Apr 7, 2010 21:46:48 GMT -5
Ray - interesting
But FAS's capital worth is more than 2X DRN and what indicating instrument (like xlf for FAS) would one employ? IYR moved in opposite directions today.
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Post by Dualism on Apr 7, 2010 21:55:16 GMT -5
Ray - interesting But FAS's capital worth is more than 2X DRN and what indicating instrument (like xlf for FAS) would one employ? IYR moved in opposite directions today. Take a look at this comparison, Jack. Note February 8th was cycle low.
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Post by Rich on Apr 7, 2010 22:01:10 GMT -5
Every time I look at these charts, I think of one thing....
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Post by jack on Apr 8, 2010 7:30:27 GMT -5
Thanks Ray - I see your point.
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Post by jnltran on Apr 8, 2010 7:56:35 GMT -5
Love the clip too.
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Post by Dualism on Apr 8, 2010 16:05:40 GMT -5
NYMO and NAMO aren't buying today's strength. They both moved lower.
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Post by ukarlewitz on Apr 8, 2010 22:22:05 GMT -5
Without posting a chart I can report that CPCE fell even further today. The 10ema closed at 0.47. I think the reversal will be very bad. A lot of eggs are in one basket.
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Post by Dualism on Apr 8, 2010 22:24:45 GMT -5
Without posting a chart I can report that CPCE fell even further today. The 10ema closed at 0.47. I think the reversal will be very bad. A lot of eggs are in one basket.
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Post by ukarlewitz on Apr 8, 2010 22:34:07 GMT -5
BDI vs Spx: why are these two diverging?
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Post by kbk3ck on Apr 8, 2010 22:42:32 GMT -5
Jim Crammer said "its just too many ships out there...uh uh We dont know but its not tracking" I guess that means I dont know either. LOL
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Post by Dualism on Apr 8, 2010 22:56:37 GMT -5
Here is a weekly chart of NYSI. Over the last 3 years or so never has the SI plateaued to only continue another full leg higher. A few instances of flat top formation however can be seen. If we don't just drop into the abyss, there is a high likelihood of choppy breadth action from day to day.
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Post by ukarlewitz on Apr 9, 2010 20:42:11 GMT -5
No one's buying puts. This is beyond uber bullish. It's past the 6 year low. I'm out of hyperboles.
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Post by Rich on Apr 9, 2010 22:08:28 GMT -5
Ukarl, I bought puts today.
I am the only man alive who bought puts.
I am now watching Joe vs. the Volcano for the second straight time.
To say I'm a loser is an understatement.
Yes, I bought puts today.
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Post by ukarlewitz on Apr 10, 2010 8:10:37 GMT -5
Thank you. I think you prevented Spx puts from being delisted. We're on the verge of a call-only market.
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Post by elle on Apr 10, 2010 11:12:19 GMT -5
Can someone look at TSO for me and see if looks like cup and handle. Don't look for this pattern and wonder when it breaks - is there a handle pattern? The sides are not symmetrical, but the bottom looks more rounded than the other steps on its continued march downward.
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Post by ukarlewitz on Apr 10, 2010 13:08:17 GMT -5
Household debt. For a long period, household debt levels were flat as a proportion of income. That started to change in the early 1980s as interest rates started to finally decline. The first box in the chart below corresponds with the first leg of the bull market, the 18 year period to 2000. Debt levels rose 30% (i.e., 20/60). Higher debt, less saving, more consumption, greater demand, higher growth, equities up significantly. The next leg, from 2003-2007, was fueled by an absurd increase in household debt as interest rates fell further still. Now, debt (consumer, mortgage, auto, etc) is nearly 120% of household income. More debt, more consumption, higher growth, equities up again. Public debt as a proportion of GDP, by the way, is less than 90%. It's high, but households are more the drunken sailors. So, where do we go from here? What drives the next leg of consumption higher? And if interest rates are on the rise, what does this imply?
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Post by ukarlewitz on Apr 10, 2010 19:49:25 GMT -5
Shiller on Housing Consider some leading indicators. The National Association of Home Builders index of traffic of prospective home buyers measures the number of people who are just starting to think about buying. In the past, it has predicted market turning points: the index peaked in June 2005, 10 months before the 2006 peak in home prices, and bottomed in November 2008, six months before the 2009 bottom in prices. The index’s current signals are negative. After peaking again in September 2009, it has been falling steadily, suggesting that home prices may have reached another downward turning point. We need to worry about strong headwinds, as the government begins to withdraw its support of a still-troubled lending industry and as foreclosures are dumping millions of homes onto the market. Read more: www.nytimes.com/2010/04/11/business/economy/11view.htmlpragcap.com/the-feds-dim-view-of-the-economy
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Post by Dualism on Apr 11, 2010 14:35:19 GMT -5
Weekly chart of NYSE Advancers minus Decliners:
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Post by Dualism on Apr 11, 2010 14:59:50 GMT -5
This weekly chart of put/call ratio demonstrates that the market is NOT rising against a backdrop of "a wall of worry."
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Post by ukarlewitz on Apr 12, 2010 10:55:41 GMT -5
Small traders, those trading 10 contracts or less, used 40% of their option volume to buy speculative call options last week. That's the most since early May 2008 when the S&P 500 was 230 points higher than it was for most of last week. Large traders spent 43% of their volume buying call options, the 2nd-most of any week since the year 2000 (March 10, 2000 was the highest, at 43.1% of total volume).
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