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Stock Market Recap for June 20, 2007 at Trader’s Narrative

bear roar.pngTells you a lot about the sort of market we’re having when after only a -1.36% move, the bears can be said to have flexed their muscles and roared a bit.

But for a strong down day, its surprising how muted the damage was.

Put call ratios didn’t budge. The CBOE put-call ratio was only 0.62 - I’d like to see 0.5 or lower for real panic. The ISEE options snapshot was 117; meaning 117 calls were bought as opening positions for every 100 puts. Yawn.

Sentiment wise, while I was a bit concerned about the Investor’s Intelligence numbers before, now it has become undoubtably negative. Just today the II’s bears shrank to less than 19%. You’d have to go back to the summer of 2004 to find a lower number.

By the way, LowRisk, which reached an extreme historical low just last week, is now at 48%. Smack dab neutral. I told you this thing was as skittish as a chihuahua after 6 espressos!

Also, the volatility measures VIX and VXN hardly budged. Sure, they ticked up but nothing that would hint that this decline had induced any serious worry.

This is the sort of market condition that drives everyone crazy. Or atleast me. I can’t see any sort of edge on a tape like this. So I’m left mostly on the sidelines.

Finally, everybody and their uncle must be staring at this chart right now, wondering if it will indeed turn out to be a double top:

spx potential double top.png

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One Response to “Stock Market Recap for June 20, 2007”  

  1. 1 Bear Stearns & the Subprime Meltdown

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