Mon 24 Jul 2006
Hey, Boo-Boo, Am I Smarter Than The Average Bear?
Posted by Quicksilver under Commentary[3] Comments
It’s hard to be bearish with this kind of information hitting the wire.? If the market really is a minority game, then forget a bear market for now.? Looks like today’s action would agree.? But then again, bear markets?have the biggest up days.? I’m curious to know now what other sentiment indicators are saying.? One?lemon does not a fruit bowl make.? Also note that as of my writing this, the Dow futures haven’t exceeded the infamous 11087 level from my density chart.? This means that there isn’t yet a change in value to the upside but mearly a retreat TO value, for whatever that is worth.? This pretty much leads one to the conclusion that nothing that has happened in the past month has been anything other than pure volatility with value never really changing from 11087 or so.? So where are all the voices crying for “Neither” in the bullish/bearish debate?? Perhaps volatility should be redefined to mean?”a period of?strong opinions, weakly held”.? Until August rolls around, the best investment advice might just be sell above 11087 and buy below it, ‘cuz we ain’t movin’, Jack.? Or perhaps you could make an option play.? There is probably no better spot that these high value areas for initiating a market-neutral?option position since they are?essentially?epicenters?of activity.? But before you do anything rash, please read my disclaimer.
July 24th, 2006 at 10:19 pm
The catch is that all the sentiment indicators have been screaming “oversold” for at least a month now. Most oscillators have been there with the sentiment, but the market keeps going down.
I think the oversold indicators have also contributed to some of the violent one-day rallies that we’ve seen. No one wants to commit long until a bounce starts, so they put stop orders above the market to catch their pending turn of the markets. Stops get run, buying spikes, then peters out. (And of course, you get some day-trades and others adding fuel to the one-day rally.)
July 24th, 2006 at 10:21 pm
I think your disclaimer points off into empty space… but then again, that could have been your point.
July 24th, 2006 at 11:50 pm
Damn links! There must be an easier way of adding them than I’m using because it’s driving me nuts.