Once again the bulls were looking for bottom today and like the children at the back seat, asking are we there yet?
The answer is a resounding no. I do not think we have reached the bottom or that the selling is over by any means. I do not care for the chart patterns nor do I care for TA. I look for balance of sentiments, long term range, flow of money and of course the manipulation that goes on in the dark pool. I do not think that the sentiment has been balanced yet. Greed and fear runs the market and there is more greed and less fear in market place. VIX is still in teens.
In the immediate future, as I had written yesterday, we shall continue to see weakness. I did not expect much of an action today because yesterday was a major distribution day and normally, the day after a distribution day is usually a green closing day. But downgrading of Ireland took that little fun out of bulls. I think for the next few days we shall see some heavy selling and rout of the late comer bulls. The following table is from one option trader’s news letter.
The major players are buying premiums unlike the last sell off of June1st. It indicates coming problem. However, if you not shorted the market at 1350, I would not recommend taking any short position now. Better be in cash and ready to start buying when the opportunity comes.