My 1/2 cent on Friday's action

In non-trending markets I sell credit spreads (Iron Condors). On Friday as it looked like SPX was breaking down, I was about to follow the herd and had placed a pending bear spread on the SPX. All of a sudden I noticed that the bid and subsequent trades at 1425 (most open interest) was going way up as market was 'breaking down.' Something didn't smell right and although I didn't go long (place a bull put spread) I did close out my pending bear spread before it placed. Seemed like someone - one of 'da girls'? - was accumulating calls at that price, Which they will promptly farm out next week. Although not at the level of most of you traders here, I have noticed that keeping a window open during the day with an eye on trades taking place at bid/asks on index strikes with most open interest can clue me in to possible future action - sometimes weeks before hand. It's uncanny how a call bid won't budge sometimed during a seeming down trend and vice versa. Deva

This market is confused. It gaps up then closes down. It gaps down then closes up. But the inescapable observation is it has High Velocity rallies based on breaking news such as on Friday regarding the monolines. Another rally catalyst is the Fed dropping rates. Other rallies are caused by bargain hunters jumping in and forcing short covering. Other than that it wants to decline in absence of any major positive news. All the characteristics of a classic bear market!

Bill Cara's comments on Friday's action: _______________________________ What happened Friday in the last hour of trading was a raid on the shorts, pure and simple. It might have been orchestrated. For certain, there were parties acting in concert if even by common motivation. I continue to say this: capital markets are losing the interest of the average person because they no longer represent a value pricing mechanism. For a world that needs liquidity to grow and prosper, that's a dangerous precedent. If liquidity contracts to the extreme, the world is facing recession, and perhaps depression. What happened in the final trading hour of the week was just another warning shot over the bow of a floundering ship. If these incidents continue, uncontrolled, it could be that the next shot is fatal.

They were acting around 10:30 AM.
I was considering puts on some junk stocks I wanted and saw put prices down
on stocks that were down. manure I called.

Bill Cara's comments on Friday's action:
_______________________________

What happened Friday in the last hour of trading was a raid on the shorts, pure and simple. It might have been orchestrated. For certain, there were parties acting in concert if even by common motivation.

I continue to say this: capital markets are losing the interest of the average person because they no longer represent a value pricing mechanism. For a world that needs liquidity to grow and prosper, that's a dangerous precedent. If liquidity contracts to the extreme, the world is facing recession, and perhaps depression.

What happened in the final trading hour of the week was just another warning shot over the bow of a floundering ship. If these incidents continue, uncontrolled, it could be that the next shot is fatal.

They have been controlling the market forever. Nothing is new. It is just that they need money badly to fill the subprime holes so their tricks are now too obvious.