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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: Lee Lichterman III who wrote (3117)3/15/2001 6:17:37 PM
From: Lee Lichterman III  Read Replies (2) of 52237
 
I made a clownish suicide QQQ options trade this afternoon that I shouldn't have with expiration tomorrow.

My reasoning was that NDX options and futures contracts close as of tonight's close. Most commercials are short and the small guys are long. Therefore it is in the big money's interest to close the market as low as possible, especially since the NDX options settle for cash.

On the other hand, QQQ and most big stocks Max Pain is higher thus they should want to rally the market hard tomorrow after settling the cash positions low tonight to get those other options as close to max pain as possible. Also, I imagine they were buying up their calls today with little premium left.

The other reason I did so was TRIN.NQ was excessively high and TICK.NQ reached -800 which is excessive and usually anything around 1000 is a bounce point.

Now the downside and why I say I am pooched here is I needed the QQQ to hold 43 and better yet to get closer to 43.5 so I was within reach for tomorrow. I now either need a 100 point rally or some big momentum to sell into on the open.

I am a fairly good advice giver but a lousy trade executioner at times since I break my own rules ever so often. I know myself and I know that after being down, I will likely take whatever I can get in the AM just to make sure I salvage some dry powder for the next battle.

I just got tires of watching the market tank and saw the high Negative TICK without much of a drop in the NASDAQ and thought it was being forced down. We'll see.

Now that I have cleansed my soul, let the tech wreck begin. <g>

Good Luck,

Lee
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