Finally Some Call Buying

While an hour of call buying does not make a top the bears should be happy to see that there is call buying at the ISE this morning. It is better than the market being up 1% and there being put buying.

Unfortunately for the bears this does not become a strong sell signal until it continues for a couple of weeks. Although if one believes we are in a bear market the amount of call buying required for a sell signal is less.

1 comment:

PJ said...

I do think we're in a bear market, but I doubt we move down this week.

Like you I've seen an awful lot of bears talking about turning bullish if the market goes above 1105 / 200 day MA, and that must tempt the market to test that area and see if buying materializes.

On the other hand max option pain is said to be 1080 and I would think the banks would prefer to keep the market between 1080 and 1100 this week. Maybe the market chops sideways this week and goes up next week before the next leg down?

I think the next round of economic data released in July is liable to be telling. Already we are seeing leading sectors (housing, retail sales) turn down while lagging sectors (industrial production, manufacturing) plateau at a high level. I think in another month the weakness will be more apparent.