Wednesday, August 18, 2010

Today's pretty flat day had me worried that the $200 million man had gotten out of his all-in short position. But no, he's still there, still all in. I would definitely have expected a large up day with him all in on the down side. Two possibilities, I think. One, and I have seen this before, it's just building up for a large move up in the next day or two. Or, two, it really wants to go down bad and him being all in on the down side was the only thing that kept the market afloat. We'll see what happens tomorrow. I didn't see anything today that would make him want to change his position. The S&P 500 has still failed to cross an apparent important threshold. In fact, he's probably out looking for a loan so he can increase his down position.

Everything else remains relatively negative. The Nasdaq 100, what I look to for what's happening longer term, has gotten back down to as negative as it's been for a while, after being way too positive a couple weeks ago. The last five quotient numbers for the Nasdaq 100, dividing the larger number by the smaller, which is almost always a positive number for this fund:

1.63, 1.59, 1.72, 1.69, 1.55

That 1.55 number is the lowest number since mid-July. Again, the highest I've ever seen was late last year and early this year at around 4.10, with the lowest number I've ever seen being something like negative 2.0, which came at the March lows of last year. Although even then it was only negative for a few days, if I recall correctly.

The Dow is very near the most negative it's been all year. Russell 2000 is within shouting distance of the most negative it's been all year.

I will note that the futures this Wednesday evening are down a monster number. So it appears the market will at least open way down, if not stay there. Some company must have had bad numbers. So this will be an interesting battle between the negativity I talked about above that I would think would make us go up, versus some bad news.

Rob