Aj - I still have 39-40 based on eyeball.
There is a staggering number of calls at strikes 43 44 45 hell all the way to 50 (and huge numbers of puts below 39 as well) I have never seen a range so wide, with huge bets all over the place.
one problem I have with too much of a fall at this point is the fact that we are 10% above where I perceive pain to be, with extremely strong bullish sentiment. Two days ago when this latest breakout started, I sure wish now I went 100% long. One sign was an extremely low trin all day long with the market just going sideways in a small range. I did not know how to read it at the time and did nothing. Accumulation perhhaps even at these lofty levels? My real thought now (after the fact - sigh)is that this was delta hedging to CYA on part of the the call sellers, and once they were protected against the latest avalance of calls they sold, the market exploded up on volume.
Of course nothing is preventing distribution now IF and big IF they know a drop is coming, of have taken enough $ from the shorts to be happy for the time being (exhaustion rally). If all the shorts are out, and there is no more $ left to chase this idiocy, then we can go down hard. I would seriously doubt a drop below QQQ 39. A slow tortuous grind down, perhaps, then one final plunge options expiry week to 39-40. A small continued headfake down would probably suck in more bears and shake out the weakest bulls.
I have no idea the probablility of any of this, I am trying to rationalize a scenario that could get us to max pain, and this is about all I can come up with.
Of course we could just sell Greenboink big time and blame it on that. Any move here, however, at these heights is based on options hedging and not on news IMO, or Greenboink.
M |
