Barack Obama II

The 44th President of The United States of America

All lined up

Stocks have hit a wall here, with volatility indexes also starting to rise from recent local lows. To top it up, put/call ratios are in "sell" territory. Could not get better for a short-term drop. Bulls have been quite aggressive recently, and as we head for year end one should expect some rally into year-end. But first a little pause or drop here would be just fine...

Still in bear market

But shorting rallies and going long after sustained drops seems to work, with each cycle about 5 days long. Today's rally is not convincing enough to go long, so unless there is another massive drop, I'd prefer to short the rallies than try going long here. With markets about 50% down from mid-year levels, a rally into the end of year is not out of question, but have to wait for a better entry...

There's the new lows now...

And this time they come with much higher levels of put/call ratios than we had yesterday. Rocket fuel for a bear-market rally here... options expiration is coming on Friday with puts fattened on record volatility levels...

Toying with new lows...

The bears are still in control, even at these very elevated volatility index levels. Put / call ratios have come down some, there does not seem to be much fuel for a rally here. Maybe even lower price levels may entice more put buyers before a rally ensues to sap those fat implied volatilities. For now, nothing to do but watch for a mega rally that could confirm a bottom... not yet though...

Back to over-stretched volatility index levels

Another chance for the bulls to come in for a little ride and for the bears to unload their short positions. Just passing the buck back and forth... put/call ratios also look lined up to favor the bulls for the near-term, perhaps going into options expiration next week. Those puts are bloated with implied volatility which somehow has to be deflated before next Friday...

Amazing America!