6 replies to this topic

[dcengr]

Of replay of last year's tape action darn its spooky.

[arbman]

scientific

I guess you meant 'emprical' or 'statistical', but thanks for sharing...

[dcengr]

scientific

I guess you meant 'emprical' or 'statistical', but thanks for sharing...

I didn't mean anything by it, except that it looks coincidentally similar

Market can and will do whatever it wants to do. I find it interesting, though that the sentiment picture and the price pattern looks similar. The gap up tomorrow is almost guaranteed too.

[arbman]

Anyway, the declining open interest at the end of a trend is the best indicator in telling the declining demand or lack of commitement or beginning of a correction. This is true in the equity, index options or futures, it doesn't matter, you will always see some sort of change in the open interest prior to large price movements. If the CBOE reported open interest numbers are correct (two days in a row), then the demand in the calls and puts had a 35% haircut. Not only the 17M calls from 3 wks ago now shrank to 11M net calls, cashed out or expired. I believe this is a very important indication that the institutional interest in the market is now changing... I want to wait a few more days to see what it will bring, but if we do not see much of a change in the open interest, the current P/C ratios actually mean much less pressure compared to what they were prior to the expirations, there is not the same support or resistance at the moment. - kisa

[Frac_Man]

I sure hope so -)

scientific

I guess you meant 'emprical' or 'statistical', but thanks for sharing...

I didn't mean anything by it, except that it looks coincidentally similar

Market can and will do whatever it wants to do. I find it interesting, though that the sentiment picture and the price pattern looks similar. The gap up tomorrow is almost guaranteed too.

[VolPivots]

If the CBOE reported open interest numbers are correct (two days in a row), then the demand in the calls and puts had a 35% haircut. Not only the 17M calls from 3 wks ago now shrank to 11M net calls, cashed out or expired. I believe this is a very important indication that the institutional interest in the market is now changing...
- kisa

Interesting observation. Supporting your thesis, I sold Feb 42.5 HPQ calls yesterday against underlying length for $0.85. HPQ closed up $0.29.....the calls closed up a nickel. Been doing something along these lines for months now and from memory when the call premiums didn't reflect price appreciation in the underlying, a correction soon followed....fwiw.

[Rich]

Gap up and crap tomorrow

Looks like a real possibility to me.

Rich