Good to close the books,got to agree the market is buoyed till end of year. IMHO the late comers running the hedge funds will be done by then to make themselves out like geniuses and of course grab the bonuses. But come January 2nd things will change as support will cease and no support means down it goes.
On the last trading day of 2006 I am going to buy 5 points out of the money short on SP500,maybe 10-20 contracts and i will sell 5 points below my purchase to reduce cost of close to money puts. Should work out well imho.
When something is too obvious, it significantly reduces its probability of actually happening. It looks to me that the "Sell-off" will be anticipated at the end of 2006, or the "new money" will mark-up the market early 2007, squeezing many shorts. But this is why we have a market. Different opinions.
I agree totally. Everyone thinks we will have a selloff for sure in January. The market never does what is certain.
Agree there is always the possibility of yat another short squeeze. This is why i will choose to use a debit spread over a credit spread. Try to make a coin or two with minimal risk as indicators do lag and we sometime must be our own leading indicator. Just makes sense in my minds eye that the hedge funds are whast keep boasting this runup and therefore once year end is done i feel the hedge funds too will be done for a spell. Best to you and yours thru this holiday season and happy trading in 2007
Interesting thing is that ADX is currently 17.59 on SPX monthly chart and just starting to rise, very serious long term investors were buyers from 800-1000 on SPX back in 2002/03, yes RSI/CCI are in O/B zone now, but on another hand there is no reverse TA signal present on a monthly chart, personally banking on a pullback based on a pattern on daily chart, but it looks like it will turn out to be a wrongly timed entry, not so much wrongly-timed, as a failing pattern.