other than apple, other large techs came down and not yet buttom. ndx p/e is 39, histroical average is 34, more pressure to gap down. the question remains? who are buying at this high valuation point?
Dumb money (passive funds) will still be buying stocks when their monthly paycheck comes in. I would guess that's part of the reason why indices are so hard to bring down and keep down. I'm not sure valuations is a good tool for timing stock advances/declines. Surely stocks were highly valued for the entire last year, too? That said, I don't think this leg down is finished, but maybe it's enough for a temporary pause.
Technically, there doesn't seem to be much edge either way. It's a difficult environment to make any hard predictions, but personally, I don't see a strong reason for why we won't continue the decline next week.
Do you sell naked or spreads (or other)? If it was, it wouldn’t fluctuate that much, historically. It would be ‘arbitraged’, and sd would be low. This basically goes for all factors. Imho
I feel that the bounce into the close may have been too much. Like tere is still too much hope in the market still. I think it would actually have been more positive if ES had closed at the low of the week. Need to flush the remaining optimisms out the thing, imo. Again, not a prediction. I have a friend who puts 50% of his paycheck into SPY and QQQ month after month, year after year. He's been pretty good at holding his cash and letting it stack up from time to time and then he'll buy a good dip. I spoke with him this morning, and he said most of the day Friday he was expecting to put his stacked cash to work at the end of the day, but when he saw the afternoon rally, I decided to wait one more day to see what happens Monday and possibly throughout the week. He's been stacking cash since early December. He doesn't sell any shares. He rides out the storm. But from time to time he puts the cash in but doesn't invest it immediately. So he isn't a market timer, but he does enjoy a good sale and dip when it comes by.
This week was a bit of fluke. We had 2 days of huge tail on Tuesday and Wednesday. But then it dived lower on Thursday, followed by another huge tail on Friday. I wouldn't be at all surprised if we get a monster rally sometime next week. On top of that, we're nearing a major trendline IMO. See the chart I posted above.