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To Uptrend, or Not to Uptrend, That is the Querstion 9/8/22

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That hedging is a lock for some kind of meltup. Once the buying starts all of that will force massive unwinding. Timing is likely soon. Duration and magnitude, don't know yet. A base breakout would give us the first measurement. 

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As posted this morning the measured move target would be 4140. But if they form another consolidation under or around 4170, and then broke out of that, the new measurement would be 4350. 

I'm leaving Paris to go to Brest tomorrow. Of course, if you're a guy and you live in Brest, that would make you a Brest man. And if you're getting married and your best bud is from Brest, then ... Never mind. 

That is all. Bonne soiree! 

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Just now, tradermark said:

What happened to QT?

Still going strong. But rallies happen in bear markets. Sometimes big ones. I believe that that hedge will have to be unwound. There are vulture funds who will make absolutely certain of it. It has the potential to be a raid like none we've seen.  

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2 minutes ago, DrStool said:

Still going strong. But rallies happen in bear markets. Sometimes big ones. I believe that that hedge will have to be unwound. There are vulture funds who will make absolutely certain of it. It has the potential to be a raid like none we've seen.  

Other than that chart from Sentimenttrader there are dozens of other sentiment stuff which show that the positioning is simply to bearish. For example CTA‘s are as „underinveeted“ in stocks like never before.

So, yes, killing those shorts and producing FOMO sentiment also among professionals makes sense.

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2 hours ago, fxfox said:

Yes it has.

My point was only: There are statistics where they don‘t show per capita numbers but only household income as such and that is misleading in an age where total numbers of households have increased massively.

But that point is not valid with regard to the hedging spike. It is orders of magnitude greater than the trend. If you're simply a matter of increase the volume it would be trending to increasing extremes along with the volume. 

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Take a look at the Barcharts.com charts. They have the COTs including the detailed positions by type of trader in the financial futures. I'll check tomorrow to see if there are any indications of extremes there.  Just because a sentiment indicator is heavy on the bearish side doesn't mean it's wrong. But when they get to historic extremes, and then reverse, that's typically a big rally signal. Has to be really extreme. 

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15 minutes ago, DrStool said:

But that point is not valid with regard to the hedging spike. It is orders of magnitude greater than the trend. If you're simply a matter of increase the volume it would be trending to increasing extremes along with the volume. 

Yes, if the percentage of Hedging of total market volume stayed more or less the same

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Sentimentrader now adjusted for market cap. Still looks quite brutal. This chart alfeady is also discussed on youtube. There a guy said that in 2008 market did fall another 25% before hitting the final low. But that doesn‘t have to mean that that fall comes NOW, only that the ultimate low doesn‘t have to be in already. Another 25% would bring us to 3000.

 

image.thumb.png.f68d3a7ae232dc77772a4124f673a52e.png

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