30 Jan 2013

 The McClellan is about as high as its ever been.  The TSV readings are also high, but the RSI is severely lagging previous highs.

 Medium term appears to have turned.

Short term is actually no longer overbought.  It is back in neutral territory.

From NowAndFutures.
"Derivatives markets guarantee a winner for every loser, but they will over time concentrate the losses in vulnerable sectors. Nature obeys Mayer’s Third Law, which holds that risk-shifting instruments will tend to shift risks onto those less able to bear them, because them as got want to keep and hedge while them as ain’t got want to get and speculate. The logic behind margin requirements in stock markets and capital requirements in banking also holds in the derivatives markets. Permitting highly leveraged institutions to hold private parties behind closed doors is the political version of selling volatility: the predictable likely gains will one day be overwhelmed by an equally predictable disastrous loss."
Martin Mayer, Somebody Please Turn on the Lights, Derivatives Strategy, 1999