Mods, I will be adding charts, analysis later tonight. So please keep this poll running. If anybody has comments on the market, charts, etc - any analysis is welcomed. For now just the educational link that has inspired the title. Strangely, the story has uncanny parallels to the current market . "Keep your paws off Knut! Fury as animal rights group calls for celebrity polar bear's castration to prevent incest By Mail Foreign Service Last updated at 1:34 PM on 04th March 2010 The world's most famous polar bear Knut is facing calls for the removal of his 'family jewels'. As though he hasn't been through enough in his short life - abandonned by his mother, separated from his beloved keeper, turning brown and then prolonged loneliness - now an animal rights group want Knut castrated to prevent incest....." http://www.dail*****.co.uk/news/wor...ty-polar-bears-castration-prevent-incest.html
notice how VIX hits new multi-year lows and SPY sells off sharply soon after that in the last 7 months. no reason to think this time is different.
iwm gapped up six days in a row and up 14 of the last 18 days. enough already. where is buylowsellhi anyhow. the poor guy must be laying in the corner in a fetal position by now.
why do i suspect some double top visionaries are going to get blinded by the sun above? If you're going to post a chart, you might want to take a look at 'the big picture,' before proclaiming the next black swan is imminent.
who said anything about a black swan? we had 4-6 (depending how you quantify them) decent dumps in the last ~7 months. each time VIX was hitting a multi-year low. 3-8% sell-offs after a few days are certainly not black swans. but they are nasty enough to erase weeks of gains.
while VIX indicates complacency, let's not forget about SPY and compare its behavior with those around several short-term tops in the last year. 1) looking at RSI SPY is overbought comparably to several short-term tops 2) SPY advanced 9% from Feb low, an advance comparable to those from recent local bottom-to-top rallies 3) SPY is only 1% away from the multi-year high, it is very reasonable to expect some sort of pull-back or stalling if before this high is taken out (if taken out at all). So, we have VIX complacency at the time when a pull-back of 2-7% in SPY is around the corner. Long momentum players are into a dangerous game here and they are bound to get hurt. Shortstradamus Is Out
I wouldnt even bother analyzing the market until the fed stops meddling. the government has messed up this system so badly its almost worthless. The price signals dont mean anything.
thanks for pointing out that the link in the original post was broken: fixed now http://tinyurl.com/ybe7axo (tinyurl preview http://preview.tinyurl.com/ybe7axo)
I have a grim feeling that we're headed for 1200+ now. It felt to me like this past week was The Decisive Moment when bears had to put up or shut up, put in a real lower high and return in force. Of course they either got destroyed, or simply refused to even try. Remember the "head and shoulders" from June-July that was all over the news (even mainstream financial sites were commenting on it)? Anyone playing that got blown out - and I think it'll be the same here with this "double top," unless the Fed really slams on the brakes. Sad reality is that the market is pricing in a full, no-strings-attached government rescue/bailout for any conceivable problem or difficulty. The government can potentially get away with this for years before something significant happens, and while there are massive problems down the road these aren't currently visible on the market's time horizon. Take the China RE bubble, for instance: it hasn't topped out yet, and in the US it was more than two years between the peak of the bubble in 2005 and the market top in 2007. The corollary is that the markets are staggeringly fragile in that any withdrawal of government support would cause a decline - which is exactly why such support probably won't be withdrawn until either things get back to normal (almost def. not gonna happen), or a real crisis develops.