Should Investors Brace For A Massive Market Sell-Off?

Posted by on January 17, 2017 12:04 am
Categories: Uncategorized

According to MarketWatch the answer is YES

Investors are bracing for a massive stock-market selloff

In that time, investors have purchased 250,000 VIX call options with a strike price at 21, and another 100,000 with the strike at 22, according to Brian Bier, head of sales and trading at Macro Risk Advisors, an options brokerage. The options cost roughly 49 cents per contract, Bier said.

We can see similar positioning in COT Reports. For instance, commercial traders (smart money) have upped their short positioning on most indices. Some levels are approaching record benchmarks. For instance, the Dow is 5X, the S&P is at 2X and the Nasdaq is at 4X short. That is a significant short position against the market.

The only negative here is seeing a "market crash" call from the mainstream financial publication. They never seem to pan out. At the same time, who knows, this time can be different.