What A Difference A Few Weeks Make

A few short weeks we saw record call buying while this morning we were seeing put buying that was almost at the opposite extreme. A few weeks ago Greece did not matter, while yesterday Germany banning short selling convinced everyone that another crash is coming. For as long as markets exist there will be over reactions and participants will get caught up in the emotion.

I am not belittling the problems out there as I see many hard years ahead for an over levered global economy. However, there will still be rallies and selloffs. With sentiment so negative I think we could see a rally and am positioned for one.

3 comments:

Anonymous said...

Mate, today $SPX low is just 2 points 200 DMA, any danger ahead or its consider okay. please share your experience

Tsachy Mishal said...

If we break the 200 day today I think we could see a final flush out before a rally.

The more bearish scenario is if we have a weak rally for a few days that works off the oversold condition and then break the 200 day.

Anonymous said...

Thanks for the comment. But it does not mean that bull market end as we already break 200 DMA or its common in bull market to break 200 DMA here and there on the way up.