Adding to the optimism to the stock market, China has decided to maintain its loose monetary policy. This has sent metal prices to new highs. Investors are very optimistic again and ignoring US poor state of health.
This is a good thing for long, as if the US shows any sign of turn around, a sustained rally may emerge from here.
However, today will be the Option Witching day, the market will be so volatile. As said earlier, Option Pain level are way lower than the current market price. However, it seems that the option pain theory is going to fail very badly this month as this China thing just destroyed the theory.
Nevertheless, there is another major economic news tomorrow, and that is the Uni M Consumer Sentiment. A good reading would allow a sustained rally, though calling for a mini pullback.
A bad reading, and the market is doomed. This is because the market has rallied hard on abnormally light volume, calling for greater volatility in the trading days ahead. The VIX index has gone above 20.
Look for a pullback, and buy into that pullback is the safest play. Be patient, the market will correct itself really soon.
4 comments:
you are the man!!!!!! but all your predictions are turn wrong. You can't beat computers.
>Tolits
Thanks for reading my blog daily. This blog expresses my opinion, if you have an opinion to share, you may contribute yours too. What are your opinions about the market? Everyone has different opinions. Be happy to hear yours.
my opinion, just see the option trade which one is larger then hit the button of your computer in the other way. That's the game....if there are so many shorters do the reverse. that is my opinion tradedragon.
Yup, so now there are too many longs?
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