7 replies to this topic

[OEXCHAOS]

Yesterday, I said:

So, they're all bulled up on the Rut and Beared up on the S&P. That's "STRONG BUY" territory? Not in my book.

In fact, the $-weighted P/C's are fairly disturbing to me. In a down trend, there's nothing more ST Bearish than modest $-weighted P/C Bearishness everywhere but the SPX. There is some paying up for puts on the NDX, so that's a help, but the OEX and RUT are low. That normally means that nobody is scared and the smart money is paying up for puts that they know will pay off.

I want to clarify a very valuable tell. I watched this work like a charm back in '08 and thereafter.

IF we are in a down trend, and IF the SPX $-weighted P/C is high but the other index $-weighted P/C's are low or neutral, it is short-term Bearish.

My read is that there aren't enough Bears and that there's some smart/big money positioning in SPX puts ahead of initiating a larger sell program.

FWIW, you can get $-weighted P/C data real time through Hamzei Analytics. I also report on this every morning in the daily letter.

Mark

[andr99]

I want to clarify a very valuable tell. I watched this work like a charm back in '08 and thereafter.

IF we are in a down trend, and IF the SPX $-weighted P/C is high but the other index $-weighted P/C's are low or neutral, it is short-term Bearish.

My read is that there aren't enough Bears and that there's some smart/big money positioning in SPX puts ahead of initiating a larger sell program.

FWIW, you can get $-weighted P/C data real time through Hamzei Analytics. I also report on this every morning in the daily letter.

Mark

I have not understood why, ahead of a sell program, they position their put bets just in the s&p and not in some other index too, but I agree that a large correction is imminent

[OEXCHAOS]

I want to clarify a very valuable tell. I watched this work like a charm back in '08 and thereafter.

IF we are in a down trend, and IF the SPX $-weighted P/C is high but the other index $-weighted P/C's are low or neutral, it is short-term Bearish.

My read is that there aren't enough Bears and that there's some smart/big money positioning in SPX puts ahead of initiating a larger sell program.

FWIW, you can get $-weighted P/C data real time through Hamzei Analytics. I also report on this every morning in the daily letter.

Mark

I have not understood why, ahead of a sell program, they position their put bets just in the s&p and not in some other index too, but I agree that a large correction is imminent

I am not sure why it works this way, save that it may be related to an index fund. Regardless, the pattern is reliable and has been for years, now. Remember, though, we have to be in an established down trend. It does not work in an up trend in a Bull Market.

[eafetrader]

Thanks Mark....Valuable insight, thanks for sharing. Question for you. What would it take for you to say we are in an established down trend? Is there a specific level of support that needs to be broken?...or would you need a series of lower lows and lower highs,..etc. At this time, do you have a probability percentage for whether an established down trend is likely? Thanks again for the sharing of ideas.

Regards, Jim P.

PS One sentiment tool I follow is AROON 14 Osc on CBOE Equity P/C ratio ($CPCE),...link below is from Greg Neal,...scroll down for AROON 14 Osc plot:

http://stockcharts.com/c-sc/sc?s=$CPC...8118&r=3214

As of Fri close AROON 14 Osc on $CPCE is signalling we are at or near Market Bottom, but indicator can be a few (2-3) days early.

[andr99]

I want to clarify a very valuable tell. I watched this work like a charm back in '08 and thereafter.

IF we are in a down trend, and IF the SPX $-weighted P/C is high but the other index $-weighted P/C's are low or neutral, it is short-term Bearish.

My read is that there aren't enough Bears and that there's some smart/big money positioning in SPX puts ahead of initiating a larger sell program.

FWIW, you can get $-weighted P/C data real time through Hamzei Analytics. I also report on this every morning in the daily letter.

Mark

I have not understood why, ahead of a sell program, they position their put bets just in the s&p and not in some other index too, but I agree that a large correction is imminent

I am not sure why it works this way, save that it may be related to an index fund. Regardless, the pattern is reliable and has been for years, now. Remember, though, we have to be in an established down trend. It does not work in an up trend in a Bull Market.

thanks

[OEXCHAOS]

A low today or by Wednesday is not at all inconsistent with my work. I have ST Buy signals setting up here too.

Mark

Thanks Mark....Valuable insight, thanks for sharing. Question for you. What would it take for you to say we are in an established down trend? Is there a specific level of support that needs to be broken?...or would you need a series of lower lows and lower highs,..etc. At this time, do you have a probability percentage for whether an established down trend is likely? Thanks again for the sharing of ideas.

Regards, Jim P.

PS One sentiment tool I follow is AROON 14 Osc on CBOE Equity P/C ratio ($CPCE),...link below is from Greg Neal,...scroll down for AROON 14 Osc plot:

http://stockcharts.com/c-sc/sc?s=$CPC...8118&r=3214

As of Fri close AROON 14 Osc on $CPCE is signalling we are at or near Market Bottom, but indicator can be a few (2-3) days early.

[thespookyone]

Gotta say Mark, your take outlined in your weekend letter looks like pure money. You've certainly been doing superior work.

[OEXCHAOS]

Gotta say Mark, your take outlined in your weekend letter looks like pure money. You've certainly been doing superior work.

Well, thanks!

I have to say, I'd really like to see some more Bearishness before I look for a rally.

I fear for what we will have to see in order to get it.

M