Buy and Sell Signals, and Other Market Perspectives Message Board

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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 670.92

+0.1%

Nov 7 4:00 PM EST

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To: GROUND ZERO™ who wrote (89667)	2/10/2017 11:51:44 AM
From: John Pitera	4 Recommendations Recommended By fred woodall Hawkmoon Mevis Pntrlady Read Replies (2) of 218589

HI GZ, I have learned from experience to never draw conclusions about a monthly chart until the month is over. January's number was certainly low. Feb first had a VIX 9.97 intra day low. The VIX overall is trending lower than in the past due to the advances in delta neutral arbitrage techniques that use options, futures and OTC products to reduce the implied volatility.... and the funding costs for these strategies is very very low especially in the countries that still have short rates close to zero. That's one reason that Deutshe Bank is so big in the area, HSBC is another, Goldman, Morgan, a bunch of the big hedge funds and the low profile banks like Rothschild , Rabobank etc. *The correct play is to be going long implied volatility at this point* as valuations are stretched and if you saw the Northman trader out of London on CNBC yesterday, he pointed out the big and building divergence in the new highs in the SPX with the lower and lower number of stocks that are above their 50 DMA. this is similar to the SPX set up before the market correction in 2015. Also the daily McClellan Summation index is diverging from these recent highs ... so the market is getting weaker from several technical aspects as we rally to new highs each day. And the leadership stocks are getting stretched on a valuation basis. ( I could not access SI for a while this morning it was telling me it was taking to long for SI to respond, yet all the other sites seemed to be working ok.... as was my live price feed.) John

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