Since no one mentioned it, the COT showed the commercials adding back to the e-mini short position (about a 70K net switch) and adding about 1K long in the full contract. This doesn't negate the prior week's huge shift, but it cuts more then 60% of it, I believe.
Also, check those QQQ options again. I now show 140K more calls than puts at 25, 170K more at 26, and only 75K more puts than calls at 24. I would be pretty shocked to see us over QQQ 26 this week by more than pennies.
Now, while I remain bearish overall, I must admit that last week smelled like a good reversal, particularly with volume. Then again, I have never believed that we'd have a war rally duplicating all prior ones, so I remain dubious. Still, if the 11 week cycle I like (slightly different than the 55 day cycle, I think) has reverted back to its regular rhythm, it hit this past week, and would likely have marked a low that will hold for three weeks. The problem here is two fold: it COULD have been a high, but more annoyingly, the last cycle around Xmas hit a week late. If that cycle holds, we get cycle lows/highs THIS week.
As for why the futures are down...the Administration has said "tomorrow is the day for action." This means either the UN passes a resolution allowing war OR the US unilaterally starts a war. In other words... it means war. With the threat of WMD, terrorism, and the tinderbox of the Mideast in general, everyone on the fence about playing for a war rally is gonna bail faster than you can say "fire in the hole." The question is will the believers in the rally jump in and buy the dips?
the freep |
