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Strategies & Market Trends : Classic TA Workplace
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To: NOW who wrote (73138)5/7/2003 11:41:32 PM
From: mishedlo  Read Replies (1) of 209892
 
something just does not fit: treasuries acting as if we are going into the crapper, and equities to the moon.
where is all this money coming from/
with options this cheap, i am thinking lots of puts are being bought as cheap hedges for all the fully invested houses.

We rose for weeks with very heavy call buying.
Is it possible that we are in a new pattern where the option buyers are correct?

What could make this possible is if
1) there is little institutional MUFU activity (I believe this to be the case) There are little inflows IMO and they have what they have for the most part and there is not much room to manipulate with with cash levels so low
2) Hedge funds are in control because of #1. If they buy calls and then buy a ton of common they can force the call writers to hedge long increasing the move. Opposite on the way down. Are they taking profits and loading up on puts and will now sell all their common? Not a bad play above pain as the option writers would probably prefer down anyway
3) If the little juys (J6p) are out of the market, and the big guys are on the sidelines win no regular cash infusions does that leave the hedge funds in control? If so are they buying puts for protection or to sell their stocks and let things plunge?

M
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