Paul, I've been expecting the same thing as you. Max Pain on the QQQ is 35 for May expiration, and we could hit that and still maintain the string of lower lows (last pivot high was 35.50 last week Tuesday).
The MM's should be taking us down here to at least the Feb lows and possibly a bit lower to get some cheap shares to distribute in mid-May for expiration. I think we may hold at NDX 1300 or so, which would equate to around COMP 1700.
A double bottom at 1700 COMP would get people in a buying frenzy, giving us our boost into May expiration, which is on the 17th. I would expect a bottom to be tested, so that would take us through the next week after a bottom, giving us a good 2-solid weeks to get up about 100-120 points and zig-zag and distribute.
I'm curious when the Dow futures will get taken down. If it is after expiration in May and they can't hold the Dow above say 10,200, the mm's will have to delta hedge below 10,000 to make money. Once 10,000 is broken, it is a swift trip to 9500-9600.
Max Pain for June is at 39 also, so if we close May expiration at 35, the MM's will have to take the QQQ to 30 at least by June expiration to make money and screw the people above. That makes QQQ 28 or below (the P&F target) a decent bet in the end of June, IMO, as Les has pointed out we often bottom on the Wednesday after expiration on major bottoms. |
