It seems like

1) naive people think the market will go higher as the momentum is that way

2) the smart people think the market will go lower because the VIX is at a low level, and they want to look smart being contrarian. They also know that you always sound smarter if you are bearish, being too afraid of being thought to be naive, and only Buffett is allowed to be bullish

3) the super smart think the market is going higher since the IPO market hasn't taken off, M&A hasn't taken off, and there are still people who have missed the rally, i.e., money on the sidelines. They also would rather talk about the rho than the vega.

Category 3 often overthinks the market, in my opinion, and some of the worst stock pickers are found in that category.

Phil McDonnell writes:

Mr. Andersson's point about rho's being important is noteworthy. The normalization of the yield curve will be the biggest macro event over the next 12 months. It is not a question of if, but when. Selling options when that happens could be hazardous to your wealth because increasing rho will cause them to rise.

Jim Sogi comments:

It seems from the depth there is some big money bidding up here. Brokers? There was also big money bidding the '07 highs as well, so not sure if that means much, but the size sure is squashing the market. No one is hitting the market, all limits, at big numbers. 


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