There are signs of froth and impending doom.
- The ES is stuck at very strong resistance around 1140 despite Nasdaq and Russell 2000 outperformance.
- Russell 2000 and Nasdaq outperformance usually occurs late in a rally. Remember October 2007, the Nasdaq strongly outperformed the S&P up to the top that month.
- The divergence of the equity and index put/call ratios. The equity options is usually traded by retail and speculators while the index options is mostly traded by hedge funds and smarter money. Equity p/c ratios are low, index p/c ratios are very high this week.
- Crude oil and gold lagging the equity indices.
I hope your right! I am not getting a feel for the markets direction at all.
ReplyDelete(if) the markets do not turn lower. Are you dumping your short? What is a good level to look for either way?
I am in no rush to close my short. I think we should go down to 1121 to fill the gap, and we may oscillate between 1120 and 1140 till options expiration and then I will be looking for a steady downtrend throughout late March to late April.
ReplyDeleteI hope you are right dawg shorts have been abused by the market for seems like a week now
ReplyDeleteHow does it feel to be poorer though. This sucks
ReplyDelete