"How do you square the possibility of a 1935-37 run with a short term top"? I'm glad you asked. :)
Normally when we have got to this sentiment level we have been or will soon be slithering up into tops with both implied volitility (VIX,VXO) and price volatility (ATR14, etc.) dropping modestly. If we do that, I feel we will have a normal top between now and Christmas or the New Year.
If instead we see continued sharp moves upward in prices, and if range shifting in 2CS, because of VXO "collapsing", causes 2CS to fall under 40, then it's a new ballgame as in 2003. So I would watch ATR14, currently at about 12 and VXO currently at about 11. If either or both drop under 10, we are off to the races as from1935-37.
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