Steve's Channelling Thread Message Board

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Strategies & Market Trends : Steve's Channelling Thread

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To: Zeev Hed who wrote (12680)	3/14/2001 9:07:10 AM
From: Mike M	of 30051

Zeev, obviously it isn't looking so good at the opening. Perhaps it is good to remember that this is Triple Witch week... Today is the Wednesday of Options expiration week. Often price movement at the open will reverse itself later in the day. The CBOE's total P/C ratio was .98 as of 4 PM yesterday. If equities are prone to move higher during the day, these options are likely to be liquidated in today's market. When put options are closed out, hedges are unwound which usually adds to the buying demand. This further increases the chance for more contracts to be closed out which leads to more hedge unwinding etc... This cycle can feed on itself. It can be the fuel of a short covering rally which can then encourage momentum players and bargain hunters. We had a crappy non bottom yesterday. Maybe we can have a jim dandy one today. Anyway, just some thoughts and not at all original.

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