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To: pvz who wrote (707)	8/19/2001 1:02:19 PM
From: mishedlo	Read Replies (1) of 2290

Put-call ratio Friday’s high put-call ratio is significant too. I have heard some say it should be discounted because of double-witching, but if other option expiries don’t result in extreme p-c readings, it shouldn’t be discounted too much either. IMO, it is still an abnormally high reading which will definitely result in a rally sometime very soon. It could rise some more before reverting to the mean, especially because the vix, while higher than it has been lately, is nowhere near an extreme. One must look at P/C ration in a couple different ways IMHO. 1) How far from options expiry are we 2) How much delta hedging got us to where we are now 3) Who is the owner of the Puts 1) is easy enough - One month away. Plenty of time to keep dropping for a bit 2) Intense and MMs may try to cover lower - kicker is FOMC and its reaction which is unknown 3) While P/C ratio seems very high (and it is), J6P has been buying calls while the COTs (commercial traders have been taking the other side of that bet in a huge way). If J6P starts buying puts we are headed up in a hurry, otherwise we could continue to drop or just go sideways. We are not quite ready for a moonlaunch here. VXN VIX etc still are on the complacent side. Novemeber most likely time after Sept/Oct tax selling. Now that I think about that, perhaps they do their tax selling early this year (Sept rather than Oct). That would sure fake the most people out. Everyone seems to be expecting a Greenspan rally here. I am not betting against it, but I sure am not betting strongly on it. If we rally and lots of calls are bought, we are going down and down hard later IMHO. M

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