If VXO and CBOE combined P/C closed today where they are now, the 2CS would still only be about 98 which is too high--it's inverted-- for a top. Since there have been signs of "emerging exuberance" this week, it seems reasonable to suppose that will follow through over the next few weeks to month and make a real and quite typical bear market exuberant rally top. However, that in turn brings up the possibility that it will NOT make top any time soon. It has been very "resistant"--I'm being anthropomorphic here--to get near an exuberant level all through this rally since March. This analysis is to demonstrate how the emergence of exuberance can flip the possibilities from rather bearish to bullish. To many that's counter-intuitive, but market sentiment is like that, much like political sentiment.
We do however have a potential tidal turn top today and SPX is hitting the 0.382 retracement of the entire bear market decline from 2007 to 2008 at 1014, so coming back down to re-test 1000 would be a reasonable possibility.
As Gilda Radner said, "it's always something".
Gone for a week. Take care.
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