J.T., I asked Zeev his point of view on this. His reply:
"I have not followed J.T. but if he is calling for a low next week, he does not differ from the turnips, the question is if that is going to be "the low" or not, or if the September lows are going to be breached, right now, I am still in the camp that September was the lows, but that "cycle" is coming to an end in few weeks. I used to follow the specialist shorting on NYSE, however, the data are always two weeks late, so i stopped using them for quite sometime. I don't see any public orgy of shorting, the short interest has certainly not gone "agog", and the public was surely not buying puts with abandon, recently. Au contraire, the institutions have been buying loads of puts on the indices, possibly sufficient insurance against that net 770 MM shares in their inventory (not even a day trading on the NYSE). In any event, my worst case scenario sees a rally no later than the end of this month or if we get serious capitulation before (not even a mild sign of that yet).
In edit, I just tried to see what are J.T.'s positions, I checked currently, he is 100% long, I also checked 4/22, the day I donned my bear suit, and he was long, and at randomn on 4/27 he was still long. Do you know if he stayed long through the whole period from 4/22, or did he took stuff off the table in between and just recently redeployed?
Zeev
Another thoughtful by Rick:
"I wonder if you have done anything else with the nyse shorting numbers. It seems to me that the relative ratio for the post bubble or atleast dec 01, no longer has the same dynamics. I wonder if the ratio itself has to be higher at the bottom, ie, instead of week of 1.1 pub/spec, then you need 1.3+; also the absolute numbers ie, the pub is 400 and the spec are 300 etc .
Perhaps, the indicator is no longer useful and in fact a sign of the usual wrongness of the crowd unless at extremes. If the indicator has been positive for 16/17 weeks and the market has been in a range or gone down, this is actually ominous in terms of market direction.
Have you looked at the ratio just prior to the bear market rallies to see this year if the indicator has any merit. As Zeev has pointed out, the 2 week lag makes it tedious to get this info unless you are well organized and
commited. I suffer from having a very full time job and have not been able to do this!
Have you looked at the ratio of member to public-- as this may make the indicator more useful.
Please understand that these suggestions are not critical; I wish I had time to dissect this tool, as I think the info still contains value.
thanks, Rick
Hope you give some thoughts on these perspectives
Best wishes,
gf |
