monday excerpts - , page-18

Caylus i agree with just about all of your fundamental views and really appreciate all the effort you put in, but i think it is worthwhile being cautious for the next couple of weeks with any shorts - for what my opinion is worth

Consensus has shifted to being short, and this makes me wary, especially with earnings season about to kick off. Options maximum pain is creeping up (920-930 on S&P), so watch out for the likes of Goldman Sachs to come up with an earnings upgrade this week (prior to their earnings next Monday), to scare the market the other way, before they send it lower after options expiry. We are sitting right on the 55 day moving average, which is generally a reliable inflection point. I have seen it too many times before - have a look what happened in 2007 during the same period, very similar set up.

If it fails to hold tonight then you will be vindicated and i think we are heading for low 800's. But if it manages to hold onto the 55 da EMA, watch out for a powerful rally into the 950-970 area into next week. This will then provide the perfect short (low vol, high price)

Good luck all