On the heels of some wild trading in global markets, massive stock market losses (as high as -42%) occurred after this warning signal.
Public Pressing Bets & Still Buying
February 25 (King World News) – Jason Goepfert at SentimenTrader: Last week, there was enough selling pressure on Friday to spike the number of stocks suffering buying climaxes. That didn’t stop the smallest of options traders, who focused on buying speculative call options to one of the greatest degrees in 20 years…
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With our weekend updates, there were a couple of developments that stood out – small traders continue to buy the dip, and the late week losses triggered a jump in buying climaxes among S&P 500 stocks. With the big losses on Monday, some of these issues have already been wrung out, but one day usually isn’t enough to wipe away weeks’ or months’ worth of issues.
When it comes to options traders, there isn’t much to add beyond what we’ve looked at over the last week or two. Speculation has been rampant. The only surprising thing is that the wobble last week didn’t deter traders at all, in fact in some cases they increased their conviction.
The smallest of options traders spent 47% of their total option volume buying speculative call options to open. In the history of the data, dating back to 2000, there were only two time periods that matched or exceeded this – the peak of the markets in 2000 and 2007.
Massive Stock Market Losses (As High As -42%)
Occurred After This Warning Signal
That sounds hyperbolic, but it’s not cherry-picked or data-mined in any way. It’s the same data, looked at in the same way, that we’ve been doing for two decades. The message is what it is. This is just one example of why Jason Goepfert is the best in the world at what he does — providing actionable market data. To subscribe to SentimenTrader CLICK HERE.
Despite Pullback, Big Picture For Gold & The World
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