Thursday, August 05, 2004 10:50:29 PM
one reason it may be wise to take any intial bounce as a relief for now:
over the weekend i posted a bit of analysis on CBOE put/call in which i argued the recent bottom was likely to be revisted. i'd like show a similar relationship between the Equity put/call and the SPX. You will clearly see the inverse relationship between the 10 MA readings of the CPC and tops and bottoms on these charts. right now, we are seeing readings that have marked the previous two tops. this implies that we may have a bit more downside in the weeks ahead. The counter that could be made to this argument is that perhaps we have made our to already (Aug 2nd) and should resume the upward move now. even so, ideally, based on this chart, we'd like to see a readings near .80 before commiting money in anything longer than a few days. This is put one "indicator" that needs to be considered amongst others...
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over the weekend i posted a bit of analysis on CBOE put/call in which i argued the recent bottom was likely to be revisted. i'd like show a similar relationship between the Equity put/call and the SPX. You will clearly see the inverse relationship between the 10 MA readings of the CPC and tops and bottoms on these charts. right now, we are seeing readings that have marked the previous two tops. this implies that we may have a bit more downside in the weeks ahead. The counter that could be made to this argument is that perhaps we have made our to already (Aug 2nd) and should resume the upward move now. even so, ideally, based on this chart, we'd like to see a readings near .80 before commiting money in anything longer than a few days. This is put one "indicator" that needs to be considered amongst others...
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