ES pops up to 38.2% projection January but ultimately ends back down in the wedge. Another high with a negative divergence, but we are getting used to that. The VIX in the last 30 mns was telling you to book profits with a strong reversal off lows while ES was making new highs. Classic non-confirmation, but bulls are still completely in charge above 1457.75.
Put to call ratio on the DOW is at .44, it does not get more optimistic than that for an index. SPX on the other hand is at 1.2. If I were to short anything based on sentiment, it would be the DOW (not that I recommend it at this point, unless you have very fast hands) This could mean rotation coming. We have been through periods like this where the DOW start under performing while NDX takes off. Keep an eye on those options. Link
That said, a big warning for bears: ISEE is at 111, even lower than yesterday after today's big rally. That means the crowd is shorting a bullish chart. My guess is that if anything explodes to the upside it could be the COMP as long as today's low, 2468, does not get violated. Any move below 2468 at this point would be a catastrophe for the markets. Long above, short below.
This entry was posted
on Wednesday, February 14, 2007 at 2/14/2007 04:20:00 PM.
You can skip to the end and leave a response.
» Post a Comment