First off, bears are not over confident and shorting massively. Many have taken profits last few days. I would be better off if I did not.
Second, specialist short ratios are quite low, so you are incorrect.
Third, fund outflows do not support a rally.
Fourth, calls for a rally to 900 from this point are patently absurd. They really are.
Yes we can get a miracle rally if Hussein turns himself over to the US for trial but how likely is that? Perhaps we capture Bin Laden tomorrow.
Rydex funds are tiny in comparison to other funds. Rydex Money is smart money except after washouts. We have not had a washout here. Far from it.
Once again you are totally grasping for staws, praying for a miracle that will put some calls into the $.
Max pain on the spoos is dropping. It is now down to 875 from 900.
Why is it dropping?
Because bears are cashing out profits and bulls are buying more calls. Those are the only things that can affect max pain, and a sinking max pain in a sinking market does not bode well, especially for February, one of the poorest market months (at least in recent history). With fund inflows spent, and fund outflows increasing, and bears taking profits, there is no fuel for a rally to 900. Not even close.
Every day we chop lower (or consolodate at a the lows for a few days). Every day you stick with a rally call to 900.
Do I think we are close to a rally point. Probably, but it might come from 775 not 830. Who knows? Right now, bears have the upper hand with every rally attempt being smacked.
TRIN and TRINQ suggest selling and da boys like to buy low and sell hi. So far da boys are not showing much signs of buying.
It would probably do you good at this point to just step away, wait for a rally and try to hop on it, or wait till we consolodate at some low point with a TRIN under .50 for a few days. That would be a decent chance.
I think we rally towards (not necessarily to max pain), but I do not know from what level, nor do we know what max pain will even be at the time. Furthermore I could be wrong. February is one month where max pain has missed before if I am not mistaken. February can get ugly.
At any rate, right now you are fighting the market, and hoping for rallies to 900 is not going to make that more likely.
M |
