My contention is we just may be "basing" between now an mid april for the next leg down.
Max pain on ORCL is 17.5 (I bet it hits)
Max pain on SUNW is 18 (I bet that hits)
Max pain on CSCO is 22.5 (no call, but they sure did gap that sucker up on friday, can they be hedging this far out already. Just does not seem likely, but they did do it a week early last time).
BRCM 35
MSFT 55
ORCL 17.5
SUNW 18
AMGN 65
CIEN 65 (they say, but my eyeball methods suggests 60)
IBM 100
QCOM 65
XLNX 45
BRCD 30
Some observations on this mess.
Except for XLNX these are very widely held stocks
Did anyone see that snap back rally from the depths of hell on AMGN?
What about that gap up on IBM?
I could not account for BRCM's relatively poor performance on Friday until I saw where pain was.
XLNX was interesting for me cause I was shorting it. There were big sellers above 47 and big buyers at 44. I think they will try and pin this sucker right at 45 and if news come out good or bad the option boys will immediately hedge around the news.
In fact, I think all of these will be pinned to max pain, which says subdued rally. I doubt there is sufficient fund $ to do much more than hold steady against the shorts. Perhaps they let MSFT get to 60 before they knock it down, or maybe they play the sector rotation game, rising something up and something down to make it look like something is happening or we are basing or whatever. But If they can get stuff to pain and pin it there, I do not see much of a rally taking place. This would not bother me much at all but it will be boring if it transpires this way. That is why some nice up and down sector rotations playing on everyones nerves is what is in store for us. So we can rally a couple hundred points around QCOM, bios that are not widely held with options, ORCL SUNW CIEN AMGN CSCO all of which are below pain. And if they can get the "gorillas" up then they can probably manage to rally a bunch of garbage they really want to get rid of like HLTH, ect.
Just looked up BRCD.
There is an enormous call position (relative to the other options) at 35. That explains (In my criminal mind) why BRCD stalled at 33 and plunged back to 29. If the option boys sold those calls (as opposed to being the holders of those calls (someone shorted the calls to the option boys), that 35 is a huge stumbling block preventing BRCD from rising much more that 33-34. I also note with interest that BRCD max pain is 30.
Lets look at "bellweather" MU - LOL
Max pain interestingly enough is 40.
Here is the problem. We are guessing (or rather I am guessing) at whether or not the "option boys" are holders or writers of the puts and calls. It make a huge difference, which is why my observations can be 180 degrees off. I hypothesize that I am correct (on the others) by how stocks are acting. That is the tell. On "bellweather" MU I simply have no idea. If the calls are some kind of hedge against a huge short position, that would seem to imply a drop in MU to max pain at 40. I am not counting on that from the POS.
Thoughts anyone?
M |
