On Twitter yesterday @RMBrenna posted from the CBOE: "Right after Mubarak speech someone bought 10K $VIX March 50 calls for .05." (A great follow, by the way)
So basically someone is placing a bet that a stock that closed at 16.09 will go to 50 or higher by the third week of March and felt enough conviction to buy the equivalent of 100,000 shares.
Seeing this and figuring someone knew something that I didn't, I had expected to see the futures collapse overnight. They did not.
That right there tells me that we can still move higher. Mubarak's speech yesterday was one of the most surreal things I've ever heard, and probably only added to the problems in Cairo, but so far the market doesn't seem to agree.
Commitment Of Traders data reveal the second highest cumulative net long position in currencies other than the dollar since its March 2008 low. This coincides with a Daily Sentiment Index reading of 93% bulls.
So we've got an extreme of bears on the dollar and an extreme of bulls in the stock market. I'm a dollar bull and a stock market bear, but I think the momentum can continue for just a bit further. Until it doesn't.
1308.98 held on the S&P cash index. I'm thinking it will hold again today, and am placing my bets with a mix of SPY, SSO, and OEX calls. I lightened up on SDS yesterday (which represents a short position) and will wait to add, hopefully above the latest highs.
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