Cover Short On Panic Days- Part 3
I would need a month to write the stats down on how extreme sentiment is right now.
Dont over-think this, dont get emotional. We are in a wave 3, the lows will at least be tested again.
I will be honest with you… bad economic data will come, dont be sucker. Markets move way ahead of the news, and always will. Moreover, the more the slide, the odds increase that we dont make new lows. Just think of 87. Bears dont need an 80 VIX, bc an 80 VIX means things will grind higher for months (again think 87-89 and 08-10). So if we do bottom here, I would not doubt we take out 1000 in Sep/Oct. Or maybe have to wait till Feb (now that would be a bearish scenario).
Anyways, (1) get out of US Bonds- China will dump them at 1% no???
(2) Look at the put volume.
(3) there are now more bear than bull assets in levered Rydex ETFs
(4) Momo seasonality
(5) VXO SP100 Vix
Bottom Line- self explanatory.