Ao minuto: EUA atacam Irão. MNE iraniano diz que país "reserva todas as opções" para se defender

[Camisa Roxa]

Eu recebo sempre um e-mail com o comentário todos os dias por volta das 2 e quando tenho tempo coloco-o aqui.

Gosto bastante de ler análises diversas, dele e de muitos outros, nem que seja para constatar que existem outros pontos de vista.

De qualquer maneira hoje o caldeirão está um pouco arrefecido pelo que é sempre uma boa leitura

Cumprimentos e bons negócios a todos!

[Ulisses Pereira]

Camisa Roxa,

Há quem goste muito do Nichols, há quem não goste nada. De qualquer das formas, o que te queria era agradecer por colocar aqui todos os dias os seus comentários para aqueles que o apreciam lerem e os que não apreciem não lerem!

Obrigado uma vez mais por contribuires para o crescimento do caldeirão.

Um abraço,
Ulisses

[Camisa Roxa]

TUESDAY a.m.
January 21, 2003



No Fear
by David Nichols

Judging by the e-mail flow, many were intrigued by my discussion of the QQV, and were left wondering the implications of the QQV falling on Friday at the same time the QQQ itself was coming apart at the seams.

No doubt there was some expiration-related component to this phenomenon. But not entirely, as this sort of attenuating factor can only go so far. With the QQV falling in sync with the QQQ, it's clear that the Nasdaq 100 has a serious problem: bullish expectations are too high .

A 10-minute chart of the QQV and QQQ tells a scary tale. Remember, the way it usually works is that the QQV -- the implied volatility measurement of the QQQ, based on real-time pricing of at-the-money puts and calls -- should be jumping on a day when the QQQ is losing 4.3% of its total value. Traders should be fearful. Demand for puts should be jumping. On Friday, it didn't happen.



Fear didn't register on the VXN either, which is the implied volatility measurement on the "big" Nasdaq 100 options that are primarily traded by institutions.



The unwinding of options positions at expiration generally creates an artificially high level of demand on the sell side, keeping the QQV and VXN suppressed to some degree. But this didn't happen on the trusty VIX, which moved up, but really not as much as it could with such a drubbing going on in the markets.



The 30 minute chart of the VIX shows a gap up back on the open on January 15th on the 30 minute chart, which is the sign that a spark of fear could be appearing. This gap up triggered the short-term decline phase for the overall market, showing (rightly) that fear is rising as prices drop. This short-term rise in the VIX is enough to take the markets within a hair's breadth of triggering a mid-term decline. But it hasn't happened yet. Yet it's very, very close. (see dashboard below for more details).

Without this fully confirmed mid-term decline, it's still too risky to jump into Rydex positions. But we'll do it on this mid-term decline. While it's not a perfect set-up, there is still the potential for this to be a big move down: excess bullishness, with a lack of fear in the face of substantial declines. This means that traders and investors will have to see dramatically lower prices before contemplating throwing in the towel.

This behavior pattern is nothing new. We've made great returns on this set-up many times throughout the bear market, buying the leveraged Rydex short funds RYVNX and RYTPX. It looks now like we're going to do it again, in spite of positive seasonal factors and a promising set-up coming off the October bottom. We'll enter these Rydex positions on confirmation of the mid--term downtrend, which could come very quickly from here.

Which brings up another point: I've had a handful of complaints that I've not been sticking to my earlier call for a "monster rally" off the October bottom. Most understand that forecasting the market is not an exact science. It involves assimilating fresh data as it arrives and purposefully not stubbornly sticking to any original premise.

The set-up was there for a monster rally, but the reality is it turned out to be tepid. I thought -- incorrectly -- that geopolitical fears had the potential to keep levels of fear high, and prices could move against the bearish majority and make substantial progress climbing this "wall of worry."

It didn't happen. Fear stayed high for quite a while, but prices didn't really make much progress. So far, the markets haven't even made a serious run at the "neckline", which were the lows of September 2001 during that memorable sell-off post 9/11. We've been mucking about under this level for months. So I'm afraid that the fresh data has not been supporting a return to a major bull phase, but rather a return to the same destructive bear market patterns.

I've found that it's much more profitable to be humble about your market predictions -- especially the long-term ones -- and to keep an open mind about assimilating data as it comes in. By the way, this is not a skill that comes easily, as the ego is desperate to hold onto an original premise thinking "it has to be right". There is NOTHING in the markets that is guaranteed to be right. And even when you are right, rarely are you right to the degree that you'd like. These are immutable market truths, which should be respected at all times.