Time and Momo

I have been coding some stuff as of late, and someday, I will be 1/50th as good as the Molecool. So if you don’t see me much here it is because C++ is getting the better of me.

Anyways on to the tape.

So here is what I have been studying as of late. I will feed you baby steps as the math takes 4 steps.

Step 1: you have seen this and the math is simple.

So don’t disregard the potential red sell signal, but let’s look to time that signal as it is possible we could drive this much higher for some time.

Step 2: Momo of the data in step 1. This is the month over month change in the CBOE put/call ratio. Yes you have seen this… and you see time will tell when one can STR. Notice in a bear market the sell is early and bull it is late- so we may have more time than one thinks- but not guaranteed.

Step 3: run that data seasonally and screw with the mathematically challenged.

Ok outliers are the point here due to the tendency for bull markets to behave differently than bear markets. However this data does a better job of separating out the raw data I might add.

Step 4: Select the relevant analog years.

It is clear things are as expected, and it is likely that we have momentum into MAY/JUN. Notice how 07 and 97 were almost identical the entire year in shape. Also notice how 98,99,04,06 were quite similar in nature. So If I were looking to STR, I would be patient and let the crowd do its thing.

Now on to the aggregate sentiment survey index.

Nothing new here either- we could stay here some time- especially if the SPX makes a new high.

Longer-term this is bearish (obviously- and don’t say I did not say so).

Now like the other data, lets look at the rate of change.

Basically this says to be patient as well.

Lastly Short interest. Waiting for some divergence.

I have a feeling something may be starting for a downside setup, but it would be best if we made a new high first and suckered the retail retards into the market. Moreover, it would be a much better setup if short interest started to rise at the same time. Either way I recommend patience, no news, zero emotion, and no bias. Lastly why is nobody participating as of late? Is everybody frustrated with the “game” or what?

So here is a cliche quote- bc – its fun and relevant every day.

“Even if I gave you all my secrets most of you would fail, because human nature does not change…” Paraphrase of Bill Eckhardt.

Cheers,

Volar