GZ, u could be right, this looks like ur normal october bottom, vix, put/calls, bears run amok.
but is this time different?
volitility:
contraryinvestor.com
my belief is that we experienced an extreme low volitilty event into the sept top, which was described by the low vix, the extreme # of low range bars in nyse and nasdaq and the mcOsiillator, the point of narrowing wedges on the indexes, eliades 'sign of the bear'
on the back side flip of this is the most overbought trin in a decade in january, along with the new economy speak at a fever pitch at march top.
the fact that off the 10/12 & 10/18 extreme sentiment and oversold readings has produced a big rally in laggard dow value stocks, while the leader nasdaq has been churning sideways is inconsistent with most major bottoms during bull, has the character changed, i suspect that will be answered soon by the reaction to csco #'s and the election.
the bear market for most stocks began in 98, while we had p/e expansion in the generals,
the generals are now experiencing p/e compression from lofty levels,
the dow is not the general is not a leader to pull the market out of the bottom of the october correction, more likely the nasdaq will pull the dow into the continuing p/e compression.
i think after csco earnings will probably turn the market back down, but as a trader i would only straddle it.
b |
