| Subject: September 25, 2003Currently, bearishness and "put buying" on the behalf of options traders in the technology, semiconductor and internet sections of the markets is at the 80 to 100th percentile |
Author:
Steve Mutual/ Option traders historically are nearly always incorrect at market picking.
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Date Posted: 27/09/03 2:46:57am
In reply to:
S&P Index a shorters short term sell-- against a long term buy
's message, "Information Stockcentral objected to being posted and removed S&P500 dated 26/9/03--U.S. timeThe low on September 26th is 996.08 Stochastic oversold.61.8% retracement991.1899" on 26/09/03 11:25:56pm
Commentary For Week of September 25, 2003 :
(Updated Each Thursday)- Bill Lussenheide
Equity markets on all fronts, both domestic and foreign continue to consolidate short term gains, but remain bullish overall. Wednesday's strong sell off, has now put the United States markets in a moderate "oversold" position, which is possibly signaling a new up leg to begin soon, possibly as early as next week.
The NDX 100 has staged one of the most impressive rallies in recent memory during the past six months, but it would appear as though there are few that believe this rally will continue. This is a positive sign. Remember that most market participants are wrong in their prognostications, and they do not use mathematical trend following systems or a disciplined mechanical approach , such as we do. In fact, we can actually measure the degree of investor emotion by watching and measuring the options markets.
Option traders historically are nearly always incorrect at market picking. We can measure option sentiment by examining how many option traders are buying Puts, (which are a position betting on a stock or market going down), and those buying Calls (a position betting on the market or stock going up). Looking at this ratio and ranking it on a percentile basis versus the ratio readings over the last year can be very insightful. Remember, that taking the contrarian position is the correct stand. Currently, bearishness and "put buying" on the behalf of options traders in the technology, semiconductor and internet sections of the markets is at the 80 to 100th percentile levels versus the past year. On a contrarian basis this is very bullish.
Remember that we always submit our market opinion to the overall mathematic intermediate trend following signals posted here without ever second guessing them. Check this site daily for the mathematically defined trend following signals.
Bonds are actually recovering somewhat, after Junes massive selloff. They have recovered about one quarter of the decline they experienced, but in the immediate short term are technically overbought, and will likely move sideways to down over the next coming weeks.
Gold has been moving up smartly, mainly because of the weaker dollar. However, consolidation is due, and overbought conditions do apply for the metal.
Rely on and check the signals at the right every day for empirical, mathematical, computer tested entry and exit points. Eliminate emotions, hunches and "seat of the pants" guessing for market decisions.
NOW MORE THAN EVER, REMEMBER AND COMMIT TO STRATEGY, PATIENCE, & DISCIPLINE!
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