Wednesday, August 12, 2009

Thin Ice or Theta Burn?

First I need to make a correction to my SPY/SPX W3 minimum requirements conditions (I miscalculated them in my last video. BTW – in order to understand what I am talking about in this post – you need to watch that video)

SPY needs to close above 101.20

SPX needs to close above 1010.48

And today S&P500 was awfully close to this chore, but as they say “Almost is not good enough”

That selloff into the close was work of perfection – a lot of institutions use DeMark works and, of course this is just a speculation, knowing that after such a vicious no fundamental reason rally (just a lot of injected liquidity and monetization of debt by FED) everyone is watching impatiently for the sign “exit here” – “they” are trying to postpone “the lighting” for as long as they can?

I am NOT implying that as soon as W3 pops on the chart – selloff will start, what I am saying – too many variables are pointing to correction from current levels and it is a fine line between correction and panic selling should price decline scare MoMo crowd and dimwitted portfolio manages (those who were running across trading floors back in October 2007 shouting “buy freshly downgraded AAAs” – we’ll make a killing on that in few months” – sure thing killing that was, most of those idiots are out on the street now, thou carrying their Golden Packages with them) who piled into worthless shares in eternal pursuit of over the benchmark performance results.

Waves, Setups, Fibonacci – tough crowd right here right now.

Not to overlook that Ken Heebner (pay attention to the date when you click on that link) was on CNBC today (and Bob Doll, yeah, he too) advising to buy buy buy – just like he did back on July 2nd 2008 – he loved oil and all shit… eh .. commodities at those levels…well – market is a cruel mistress – collapse started 9 calendar days later.

Back to market talk…

Today’s close makes me think – if they try to keep SPY from printing W3 impulsive UP on daily and they do not sell it to oblivion as of yet – what if, as we get closer to options exp Friday (next week), all everyone is going to get is lingering action at about these levels with maximum theta burn?

Time will tell…

No charts today – get your own charts :)