Mish -- I, as usual, have a question. You state that as long as people keep buying calls, delta hedging will take us higher. Since calls always outnumber puts, I am confused as to why we don't always trend higher. I thought that delta hedging usually kicked in much closer to and right after expiry (where we admittedly are right now, but I don't believe you're saying this is related to last week's expiry). Since we have more than 4 weeks til September expiry, what delta hedging are you seeing now?
Also, you say that 58K Sept 26 QQQ calls were bought today. All I see is total volume of 58K. Couldn't at least some of them be sells? I do note that the volume on the QQQ Sept 26 puts was 257. And assuming that 58K figure contains more buys than sells, that open interest imbalance is gonna grow. That is an imbalance that strikes me as huge. To my eyes, it's bearish. HOWEVER. . .
I don't know why smart money can't be buying those calls knowing that the path of least resistance, until proven otherwise, is up on the backs of bears who slowly give in and, dare I say it, decent market internals. That imbalance has been there for some time, and the market has continued to climb, despite daily bear denunciations. <g>
Like you, I really don't know where we are heading here. Lotta bear doubt. Lotta bullish confidence. We'll see.
the freep |
