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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Playin my Cards who wrote (8251)	8/16/1998 8:19:00 PM
From: Herm	of 14162

OK! Fair question. The ratio is = avg. shares traded/short interest to give you the number of days it would take to trade the current shorted shares by itself (ratio). So, for the last three months known the number of actual days of that ratio has increased. Next Friday we will see the short interest change from July 15 to August 15, 1998. I'm guessing that it will be up some more! The larger the ratio the sooner the stock will stall because of the increase liquidity (on paper as a loan)created by the extra shares traded. As the price pulls back, investors will start to liquidate their shares and the shorts will step in and buy them. A few large program block dumps and BOOM! TIMBER, the stock goes into free fall by panic selling! Average shares traded is 428,200. Friday was more than a 25% increase in volume. BB has been tagged and RSI is at 80+! The stock just about closed on the low of the day. That's telling me the stock has already started to fade. Monday, should be a pop up and then TIMBER! XIRC Date Close Change Day High Day Low Volume Aug 14 24 7/8 + 3/8 +1.53% 25 1/8 24 1/4 899,800 Aug 13 24 1/2 +1 1/8 +4.81% 24 3/4 22 7/8 748,300 Aug 12 23 3/8 + 1/2 +2.19% 23 15/16 22 5/8 522,800 Aug 11 22 7/8 - 1/16 -0.27% 22 7/8 21 9/16 808,800 Aug 10 22 15/16 + 1/4 +1.10% 23 1/8 22 1/4 460,600

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