20/20 Hindsight

  • The longer this market goes without a bounce the more likely it becomes that we close on the lows. Although the fact that we are so close to the end of the quarter could change that dynamic.
  • Anecdotally, I had been hearing more chatter about a quarter end rally than I liked but none of the other data I looked at confirmed the optimism so I ignored it. In hindsight, maybe I should have payed more attention.
  • Or was the fact that the market was so weak before we saw capitulation the better tell? 
  • Anecdotally,  I am no longer hearing anything good about the stock market. Talk of an end of the quarter rally has ceased.
  • At the ISE we are seeing heavy put buying with the equity only under 100. That is a rarity.
  • We are seeing put activity at the CBOE as well but given the size of the decline I would have liked to see more.

2 comments:

nicasurfer said...

not impresses at cboe either. Thanks for confirming my suspicion

Onlooker said...

The evidence is piling up that the character of this market has clearly changed, as you have alluded to previously. It's now time to sell rallies and sell further into weakness. Oversold will become more oversold and then even when the indicators back off from the lows we see lower prices.

We've now seen the market fail at key moving averages, bounce to only modest daily RSI readings before falling again, and all the while the bottom pickers are trying to catch the knives (I admit to having tried to do it myself, too soon).

Those who don't adapt here, or wait too long to do so, will get run over. Many undoubtedly already have, as you've noted.

It really looks like we have to see sub-1000 before a vigorous bounce materializes. I'd like to have a sizable cash position when we get there.

Gold on the other hand just keeps getting back up off the mat. And top pickers are everywhere. I admit to having being shaken out of part of my position and watching it keep going up. Still think we get a sizable correction there soon. Maybe when stocks take the next leg down.