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Strategies & Market Trends : Classic TA Workplace

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To: JRI who wrote (10364)	8/18/2001 8:55:55 PM
From: jeffsthoughts	Read Replies (1) of 209892

I'm curious about something. I noticed that the "Max Pain" theory seemed to fail rather miserably this time around. Q's should have been at 41 I believe. Same is true for a lot of individual tech stocks. In other words, option writers theoretically got nailed this time around and the put buyers "won." Did Max Pain fail to this same degree in the prior 3 months? If not, what does this imply? If those who bt puts were the previous writers, then does that imply that they have capitulated? Alternatively, now that the put buyers made their killing this time around, is it time for the market to rally? If, on the other hand, it is the same cast of players on the same side of the transactions as previous months, would the failure to bounce before expiration to erode put premiums imply a more wicked downside is brewing? In other words, could the absence of an all-out crash on Friday be viewed as simply the "bounce" that Max Pain would have suggested was due? Now that the artifical "support" is out of the way, could we expect a serious crash as early as next week?

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