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Chaff and Wheat

Chaff and Wheat

by The MoleFebruary 25, 2009

UPDATE 12:18pm EST: Here’s where the chaff separates from the wheat:

I think the chart is pretty clear although I admit that I’m liberal with that channel. Yen so far is not convincing me – kind of weak. Don’t get too married to the downside – I’m sitting on a boat load of puts but am ready to hede with some NQ or ES futures again if I see this upper border being breached.

UPDATE 12:26pm EST: Someone mentioned the p/c ratio but I now prefer the ISEE:

So if you fade the MMs and the institutions long put/call sentiment is:

All Securities: bullish
All Equities: bullish!
Indices and ETFs Only: bearish

Glad I’ve got SPY puts – LOL – but seriously this is a mixed bag. Can be interpreted in various ways – e.g. high bullish maybe bearish signal, or high reading might mean we get a snap back to the upside. Whatever – but what irks me is the discrepancy between equities and indices. Anyone any suggesions as to how to interpret this?

UPDATE 1:54pm EST: See, I told you guys to not get too comfortable with the short side. I’m taking a tiny hit right now on those SPY futures but fortunately I did compensate this morning with my NQs. If we breach 775 I might sell some puts against them as we then might see 790.

UPDATE 2:06pm EST: We bounced back from those lofty heights – I like that – clear cut and we didn’t spend much time up there. Let’s see what the next hour brings. I’m staying short and thick.

About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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