US Market Shaking Dangerously...
Welcome to week 3 of November, the week when November options will expire.
Even though it is options expiration week, it isn't something that usually increases volatility in the US market except during quadruple witching days, which this week isn't (read more about What Quadruple Witching Is). However, what is very likely to shake the market up this week is the observation that I pointed to in last week's reports... that the market is showing some very dangerous and shaky signs... which remains true today.
Investors and options traders continue to be extremely split right now...
Bond yields rose across the board as investors reallocate back into equities but options traders continue to keep total equities put call ratio in favor of put options trading. This kind of behavior is very characteristic around major trend changes. Yes, like I mentioned last week, this is the kind of behavior that, when occurring around this level and reinforced by all of the other dangerous signals that I mentioned last week, can start significant intermediate corrections.
As such, I continue to be careful around this area and me and my Master's Stock Options Picks subscribers have also taken profit on all of our existing call options positions rather than risk a profitable season so far.
For now, the market turns a short term neutral trend within an intermediate bull trend and primary bull trend.
Even though it is options expiration week, it isn't something that usually increases volatility in the US market except during quadruple witching days, which this week isn't (read more about What Quadruple Witching Is). However, what is very likely to shake the market up this week is the observation that I pointed to in last week's reports... that the market is showing some very dangerous and shaky signs... which remains true today.
Investors and options traders continue to be extremely split right now...
Bond yields rose across the board as investors reallocate back into equities but options traders continue to keep total equities put call ratio in favor of put options trading. This kind of behavior is very characteristic around major trend changes. Yes, like I mentioned last week, this is the kind of behavior that, when occurring around this level and reinforced by all of the other dangerous signals that I mentioned last week, can start significant intermediate corrections.
As such, I continue to be careful around this area and me and my Master's Stock Options Picks subscribers have also taken profit on all of our existing call options positions rather than risk a profitable season so far.
For now, the market turns a short term neutral trend within an intermediate bull trend and primary bull trend.
posted by Jason Ng at 1:58 AM
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