5 replies to this topic

[arbman]

Everything is perfectly aligned for a rally here, the oils are leading, the semis are oversold. The rates are lower and USD is somewhat stable. If this squeeze gets speculated and I see a lot of bottom picking, watch out below for a failure in the afternoon. I actually expected today to close at the bottom tick and then a hard squeeze tomorrow, however an early speculation in the afternoon would kill this market into the expirations and then a cascade lower with a bunch of unwinding positions. This was so low odds only a few days ago and now we are seeing a huge range expansion and everyone is excited for a snapback rally --may I ask where the breath will come from beyond oversold?!? Folks! the market can not bottom like this... - kisa

[arbman]

OK, the squeeze stopped the decline and I really do not see how the indices will be able to decline meaningfully with the opex and so negative equity P/C, around 0.85. I closed all of the shorts for now, I will play a rebound tomorrow and another round of decline next week...

Here's the proof of bottom picking in the last 30 mins...

30 min changes of the equity, index and total P/Cs

9:00 AM 205681 139064 0.676115 101468 292931 2.886930 307149 431995 1.406467
9:30 AM 142248 131385 0.923633 80242 118650 1.478652 222490 250035 1.123803
10:00 AM 136361 113042 0.828991 65220 143795 2.204768 201584 256837 1.274094
10:30 AM 118048 69441 0.588244 100607 91015 0.904659 218655 160456 0.733832
11:00 AM 80370 87595 1.089897 40469 126431 3.124144 120839 214026 1.771167
11:30 AM 87546 74321 0.848937 67674 94625 1.398247 155220 168946 1.088429
12:00 PM 64918 74064 1.140885 36464 46822 1.284061 101382 120886 1.192381
12:30 PM 57930 50782 0.876610 34134 91177 2.671149 92064 141959 1.541960
1:00 PM 73572 53585 0.728334 53182 87794 1.650822 126754 141379 1.115381
1:30 PM 66526 97446 1.464781 29769 60151 2.020592 96295 157597 1.636606
2:00 PM 76316 53990 0.707453 37831 54225 1.433348 114147 108215 0.948032
2:30 PM 132748 72859 0.548852 23184 50170 2.163992 155932 123029 0.788991

OEX P/C has increased its bearishness in the mean time. This is why I think any rally will be only a bounce, the last few minutes can still sell off here. The market is looking to escape lower, imho, not higher at this juncture...

- kisa

[kaiser soze]

I too see bottom picking everywhere today. I am skeptical of the parablic blow-off a lot are expecting. I think the IT top is near. Maybe the TD sequential countdown on the major indices needs to trigger for the actual top to be made. I think the Dow is on a 11 and other indices are a few more days off.

[arbman]

There were a total of 224746 new call contracts bought vs 89032 put contracts (all equity), this ratio is 0.396 on 1/2 hourly basis. This lowered the daily equity P/C to 0.61 from 0.84 earlier during the day. The open interest now stands at 14.5M net calls almost back to the Monday morning's levels, but down from yesterday's 14.8M net calls. So, everyone was busy bottom picking in the last hour. Tomorrow from whatever high that it opens, it will head down eventually, perhaps on Friday, into the expirations. - kisa

[kaiser soze]

I had CNBC on around 3:45 pm when Cramer showed up on Street Signs with Erin Burnett and basically said several leading stocks were trading slightly below their July expiration Max-Pain points, so buying would kick in in the last hour to drive them to those strikes. Now Cramer is not good at technical stuff like this so I can only assume he got this information from some of his better informed buddies in Greenwich-land.

Edited by kaiser soze, 18 July 2007 - 09:14 PM.

[kaiser soze]

BTW that was 2:45 pm not 3:45 pm when I saw Cramer on TV

Edited by kaiser soze, 18 July 2007 - 09:58 PM.