Wednesday, December 8, 2010

Sentiment Finally Approaching An Extreme

Sentiment as measured by the PPO of the equity only put/call ratio is finally approaching its extreme upper limit after hitting an extreme low in May. Had we put aside all other speculations and gone long on the low of this indicator we would have done quite well.


4 comments:

dave said...

Craig,

http://www.msnbc.msn.com/id/40571573/ns/business-us_business

Regards,

dave

R. Craig Pritchard said...

Thanks. This article was in the local paper this morning. I can't begin to tell you how badly the banks are behaving. I've experienced it first hand with my construction business this year. Holding deposits for 2 to 5 days has become the norm now, which makes it very difficult to pay people in a timely manner.

Also, in Bernanke's 60 Minutes interview he implied that Banks stood ready to lend and that lending was weak due to borrowers with poor credit quality. I know for a fact that is an out and out falsehood. I know several people with excellent credit who have had difficulty getting loans for standard business activities.

Regardless of how this rally goes, it is built on a lie. Knowing that makes it hard to be long.

dave said...

Craig,

Don't know if you remember me from 08 & 09. I remember how strongly you felt about the banks & thought about you when i read the article.

Many of the stories in the article were extremely negligent & abusive.
Frankly, i don't know how some of the bank employees can look themselves in the mirror who are involved with the processes described.

A yr ago i decided that the mkt wouldn't have enough beta or volatility for me to follow on an intraday basis & spend as much time upon as i had done for a very long time previously. I have been very glad with that decision. Until such time othewise...

Regards,

dave

R. Craig Pritchard said...

Dave,

Thanks for following up. Over time the page views on this blog have continued to grow, but not the number of comments. In some ways that is a blessing as so many of the comments that I read on other blogs and sites are so inane, but feedback is still a helpful thing and I appreciated the time you took to post comments.

I hope you are doing well in your current situation. I am sure the markets will be around for you should you decide to become more involved again.

I personally have made a decision to not trade intraday as I see little upside for my personal goals and it seems to require a level of precision that is not required for trading longer time frames, which is my preference and where I have had greater success. This has led to an expanding level of freedom, but there is no free lunch or get rich quick program that I have found. It is hard work most of the time.

I too am making a change as I am exiting the construction business after 16 years. For the time being I am earning my keep as a consulting engineer. It is not as exciting as construction, but has far fewer headaches.

Thanks for catching up.

All the best,

Craig