RD, i wouldn't go that far...but if the ruling is benign, we can be 100% sure of a leak, as thousands of out of the money MSFT November calls were bought today and only very few puts.
as for the rally, we have a combination of factors at work here, beginning with the excessive bearish sentiment and oversold conditions at the recent lows, the strong fund inflows during October, the record high short positions, and the large number of outstanding call contracts. all this spurns round after round of buying, at even the slightest hint of good news. obviously a kind of permanent short squeeze is going on in the parabola stocks...most have relatively small floats and very large short positions (well, not anymore, probably).
like Don i have to say that the possible extent of such blow-off moves is very hard to gauge...it could end on Monday (unlikely, imo) or it could carry on for quite a while yet...
considering the NAZ's year-to-date gain you either have to be a rather giddy optimist to be buying here or a desperate short...
one more thing: i believe the Fed's decision to provide ample liquidity due to Y2K is playing a big role in this run in stocks and bonds as well.
regards,
hb |
