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Gregory Mannarino
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I started my financial career working for the securities and trading arm of the now defunct Bear Stearns before thedot-com bubble. I am an active trader of the capital markets. I have published several books pertaining to finance, global economics, and equity trading; My most recent book is... More
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  • High Probability Of A Short Term Stock Market Pullback Right Now. 4 comments
    Aug 19, 2014 12:59 PM

    Yes this market is going higher however, I believe there is an opportunity right now to get long volatility and short a couple of equities (see my site

    I do not suspect this pullback will last more than a couple of days at most, but why not try to capitalize on it!

    Could I also be wrong? Yes. But no risk then no payoff if Im right!

    This market has been on a tear to the upside since I called the bottom on August 11, (See my blog which I posted here on that date), and a pullback right now would in my opinion set us up for yet another leg higher.

    Let me share a few charts with you.

    This first one is the CBOE SKEW index, I have said many times on my business day MarketReport on YouTube that I use this "tool" to help me gauge risk. As you can see this index is rising, so more risk in this market.

    (click to enlarge)

    This second chart is the VIX.

    It appears that a reversal may be about to take place.

    (click to enlarge)

    This third chart is the S&P500.

    It appears that we may be encountering resistance here.

    If we put all this together, it appears likely that a pullback may occur. What are your thoughts?

    (click to enlarge)

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Comments (4)
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  • mus
    , contributor
    Comments (46) | Send Message
    wise reasoning
    19 Aug 2014, 01:06 PM Reply Like
  • Start a Change
    , contributor
    Comment (1) | Send Message
    In the next couple of days I think we will see a modest pullback but not too much at all. Fed meeting minutes come out tomorrow which will probably give a slight boost to equities. Then, on Thursday we will hear from the central bank confab in Wyoming telling us that they will continue to prop up the markets with low interest rates and money printing. Equities will respond favorably to the news. Just my thoughts.
    19 Aug 2014, 07:39 PM Reply Like
  • George Moya
    , contributor
    Comments (2) | Send Message
    I don't understand these charts
    19 Aug 2014, 09:49 PM Reply Like
  • Robert Hyland
    , contributor
    Comment (1) | Send Message
    By "shorting" you're referring to making "Puts" not REAL shorting, right?
    20 Aug 2014, 02:29 AM Reply Like
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