THERE IS A RHYTHM FOR THOSE WHO CAN HEAR IT

The tug of war between the bears and the bulls is an ongoing saga. Here's a piece from MarketWatch,

"This ‘smart money’ indicator nailed the dot-com bust, and it’s even more bearish now." 

Let's first say a word about what we like to do, though this is not investment advice for anyone nor is it intended to be construed as such. It's what we like to do and we take ownership when we do.

Sell out of the money calls and buy out of the money puts, sometimes deep out of the money puts. Now indicators are just that, indicators. Like life, but don't try to tell this to politicians and bureaucrats, there are no guarantees.

They tell you in school one of the objects of investing your hard earned capital is to provide money for firms to create growth and jobs. And so in part it is. But firms oftentimes find ways to waste that capital. (Sorry, but we just have to add this, as do politicians and bureaucrats!) No hard feelings here, just caveats have their function. 

The real object is to make money: Making money for your retirement, for your kid's education, so you can someday get off the time card cycle, so you can perhaps start your own business or so you can just set it aflame and just watch it burn. Forget that at your own peril. Never let anyone shame you into thinking that is un-American.

You don't always make money because things go up. You can make some by protecting yourself when they go down. Both have their costs and their risks.

 

“Smart money” is betting against the bulls in a huge way.
When it comes to investing in the stock market, the crowd is often wrong at extremes. A contrarian’s delight. This, according to Dana Lyons of J. Lyons Fund Management, is not one of those times. At least, if history is any indication. Of course, that’s a pretty big “if.”
Nevertheless, it’s worth noting what’s going on with the traders of S&P 100 options OEX, +0.73%

“Historically, this group has been on the right side of the market more times than not when their collective options position is at an extreme,” Lyons wrote in a blog post in which he pointed out that OEX traders have never held more put options relative to call options.
By the numbers, Friday’s readings marked the first time in history with more than three put options for every call. The record didn’t last long. On Monday, it rose to 3.3 options for every call.
This chart shows just how rare these kinds of extremes have been. To put it in perspective, between 1999 and 2014, the reading broke past two puts for every call just 15 days.

Like one of our favorite boxing sayings: There is a rhythm for those who can hear it.

marketwatch.com/story/this-smart-money-indicator-nailed-the-dot-com-bust-and-its-even-more-bearish-now-2015-12-22