Short squeeze of non-commercials in the futures market was a big factor behind the rally in the S&P 500 since mid-June. These traders have now targeted the Nasdaq 100. This has raised tech bulls’ hopes for a squeeze. But conditions … Continued
Sentiment indicators are beginning to come in from elevated levels. This both preceded and followed the latest three-day selloff in stocks. Wednesday, bulls tried to stem the damage by buying. Immediately ahead, VIX is the one to watch. Last week, … Continued
Bears are putting foot down. On both the S&P 500 and Russell 2000, bulls last week were unable to break through multi-year resistance, even as the Nasdaq 100 finished right on rising-channel support from March. All this followed massive gains … Continued
The same way investor fear was pervasive in March, greed is reflected in several metrics currently. Reversal risks are very high medium- to long-term. Near-term, how VIX behaves in the next several sessions will decide if sentiment gets ever frothier. … Continued
Following futures positions of non-commercials are as of August 25, 2020. 10-year note: Currently net long 72.3k, down 14.7k. The 10-year Treasury yield (0.73 percent) is itching to break out of a five-and-a-half-month rectangle between 0.57 percent and 0.74 percent. … Continued
US equity indices have had massive gains in the past four months. In the options market, calls heavily outweigh puts – to a point where it is beginning to look dangerously lop-sided. If past is prologue, during such times it … Continued
In the last few weeks, money has moved out of money-market funds which ballooned to just under $5 trillion, but not into stocks. Equity bulls are hoping the so-called cash-on-the-sidelines will find a home in stocks. The problem is, major … Continued
Last Thursday’s sizable drop in major US equity indices was sudden. Several metrics were so deep into overbought territory the decline probably did not come as a surprise to many. The magnitude of it was. Indices have rallied in the … Continued
NAAIM and AAII bulls do not always move hand in hand. Understandably so. They represent two different buying sources. Currently, they are going their separate ways. The spread between the two is fast approaching a level that in the past … Continued
After massive rallies since the lows of March, major US stock indices saw sellers show up later last week at/near important resistance. Some indicators made a quick switch from fear to greed. This is coming at a time when the … Continued