Mish, remember that this bear market has one constant - lower highs on each peak going back 2-years. The high at 1832 COMP (NDX 1425) is unlikely to be surpassed (it may be met, however, in May) if this trend continues. Unless you slay the bear, this will continue.
With that in mind, June Max Pain is in an entirely different perspective.
With May expiration only 3-1/2 weeks away, we have seen no signs of delta hedging. Furthermore, the real time of reckoning will happen when the futures are in danger.
Notice the times we've hit hard - Dec. 2000, March 2001, Sept. 2001. Those all have been months where the futures expired (end of quarter) and they have been the lows. June is one of those months, making it an excellent time for a major bottom. QQQ 37-40 is something we may not see for another 2-years, so to expect that in June is a bit of a leap of faith, IMO. There is also a major cycle low in the end of June.
Remember when Max Pain is in sight, we normally can get to it. It is only when it is at an unreasonable distance about 3-4 weeks before expiration that they start to take things down hard.
By the way, the support levels we are close to will be defended vigorously this time, IMO. The end of May will be a different matter, IMO. |
