Remember the rule, they rallied INTC above max pain then sold off sharply crossing under it on Wed of Expiry week. It continued down today which was expected given the lack of a rally yesterday.
My rule calls it a win for max pain if midweek of expiry week, max pain is hit. This took me a while to figure out but I am 100% positive they shorted above pain and held. Thus there is no loss at all to any puts that expire in the money.
Doing this so late in the game, they sucked out nearly 100% of the time premium on those last minute put options to boot. Call holders that were counting gains 3 days ago saw them vanish up in smoke. Poof. Just like that. Put holder taht bought too early (or overstayed their welcom from two weeks ago) had those options go up in smoke as well.
This is the game that was played for three months in a row.
We overshot then we correct. Look at SEBL, same thing, max pain 35 but one that broke it fell quickly. Again some will look at this as a max pain failure, I regard this as a max pain success.
I was also looking ahead at April and wondering if the fact that Max Pain for INTC in april is 30, had anything to do with it. It has been 32 1/2 for three months but now it is 30. (Lots of calls bought in Oct-Nov strike 30 for April) to give them time? LOL. That is a guess. Perhaps "da boys" needed a head start so they need to drop INTC to 27, then rally it to 33 then sell it off to 30. Who knows. Actually I do not think stuff like this is planned ahead, but the notion crossed my mind.
The more I look at options the more convinced I become that we are just going to flop around from here +- 200 points or so until there is some strong influence that will take us higher or lower. This has the feel, more or less to me anyaway, of last summer rather than last Spring.
They have now lowered estimates, yet again for INTC MU etc, maybe one of these times someone will beat one of these lowered targets to cause mass hysteria and bull snorting.
It will be a mirage of course but how good earnings are we expecting now? Early warning season is upon us. Will AMAT or KLAC finally tell the truth? I doubt it. EMLX sure looks like it wants to warn, however.
I see no inpetus for a rally here other than we are a bit oversold now. We rallied on economic news but that died. Will there be a business uptick before the consumer gives up?
That is the main question now, for which I have no answer.
M |
