Short-term Breadth Update

In case you were purposefully not watching the market today… there was a bit of a train wreck. Looking at the futures after hours and seeing the continuation of downside pressure thanks to Cisco ($CSCO). Who knows what will happen overnight, but Thursday could be another ugly day, at least until the knife catchers come in. There is quite a bit of economic data coming out on Friday and the weekly claims tomorrow so that data could make it nice and dicey until opex next week. I’ve been net short the whole cycle so today was a nice respite for me as the extrinsic value was sucked out hard the last two days.

I put up a chart of the short-term breadth below and as you can see it’s looking grim. Last time I posted this (4 trading days ago), the $IWM was at 34% the $SPY was at 54% and the $QQQQ was at 51%. Since the 5th every single one of the ETFs is below 5%. I’m not calling for a bounce here, but eventually I’ll see something in the major indices that would cause me to sell some out-of-the-money premium. Perhaps I’ll dip into the new “financial crack” they call weekly options.