NASDAQ 100: Read the description
Nasdaq 100 bounced back from the lows of 12950 and had trouble with staying under the 13000 level.
Put call ratio for the market (PCC) have been falling, which indicates more calls are bought than puts. Looking at the past levels of the ratio it seems likely that the ratio is ready for mean reverting at this point. However put/call for equities (PCPS) are high, and could also be ready for a move lower while the general market put/call moves higher. Notice that the last weeks increase have not caused the put/call for equities to rise as much as previous when prices of nasdaq increased. this could again indicate that investors are less desire loading calls.
Inflation expectations are still high (RINF), and FED indicated 6 more rate hikes to an expected federal funds rate of 1.9% end of year.
VXX have been falling as a result of the increased price in stocks. But we could still see higher levels of VXX on the basis of increasing interest rates, high inflation and lower P/E ratios.
High inflation (USIRYY) results in lower levels of consumer and business spending which lead to declining sales higher costs and therefore lower earnings. And a combination of high interest rates and high inflation leads to lower P/E ratio
US03MY is also on the rise, and beta values for the 10 largest components of Nasdaq is over 1, which means in bear market, those stocks tend to fall more than the market. High risk free rate (US03MY) and high beta values will increase the CAPM cost of equity which again supports a price reduction in equities.
The strategy is the same as before. Short every move higher (when in bear markets, the sudden and unexplainable and dramatic increase in stocks are brutal -this will shake retail out of their positions shorts and longs before moving lower. I still anticipate a move lower for 12000 level as the first low level. (I could be wrong for the move lower, but managing the right leverage will keep one from blowing up account or generating too much drawdown.)
Everyone have FOMO right now of missing the bottom. Which is what the big guys want retail to have.
Again i dont say that there are no bottom, we could have bottomed out, but when looking at all the indications I am convinced that we still can see lower price levels this year.
Put call ratio for the market (PCC) have been falling, which indicates more calls are bought than puts. Looking at the past levels of the ratio it seems likely that the ratio is ready for mean reverting at this point. However put/call for equities (PCPS) are high, and could also be ready for a move lower while the general market put/call moves higher. Notice that the last weeks increase have not caused the put/call for equities to rise as much as previous when prices of nasdaq increased. this could again indicate that investors are less desire loading calls.
Inflation expectations are still high (RINF), and FED indicated 6 more rate hikes to an expected federal funds rate of 1.9% end of year.
VXX have been falling as a result of the increased price in stocks. But we could still see higher levels of VXX on the basis of increasing interest rates, high inflation and lower P/E ratios.
High inflation (USIRYY) results in lower levels of consumer and business spending which lead to declining sales higher costs and therefore lower earnings. And a combination of high interest rates and high inflation leads to lower P/E ratio
US03MY is also on the rise, and beta values for the 10 largest components of Nasdaq is over 1, which means in bear market, those stocks tend to fall more than the market. High risk free rate (US03MY) and high beta values will increase the CAPM cost of equity which again supports a price reduction in equities.
The strategy is the same as before. Short every move higher (when in bear markets, the sudden and unexplainable and dramatic increase in stocks are brutal -this will shake retail out of their positions shorts and longs before moving lower. I still anticipate a move lower for 12000 level as the first low level. (I could be wrong for the move lower, but managing the right leverage will keep one from blowing up account or generating too much drawdown.)
Everyone have FOMO right now of missing the bottom. Which is what the big guys want retail to have.
Again i dont say that there are no bottom, we could have bottomed out, but when looking at all the indications I am convinced that we still can see lower price levels this year.
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