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Strategies & Market Trends : Classic TA Workplace

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To: Henry J Costanzo who wrote (85865)	11/15/2003 2:53:39 PM
From: mishedlo	Read Replies (2) of 209892

Huge OI - particulary when it is equal on both sides is like a magnet. Look at QQQ 35 action this past week. If we are in panic mode (and much of this year was in panic buy mode) it will not work. It will not work in panic sell mode either. In choppy markets or non-trending markets, option sellers ususally have a field day. Furthermore high OI at a strike provides resistance on calls, and support on puts. It is when those beak, that delta hedging kicks in an the option sellers have to hedge in the direction of the move eggagerating the swing. We are in an ENORMOUSLY derrivative market right now IMO, and one of these days there is going to be a huge break when there are tons of puts out there and all hell will break loose. Such a waterfall would be impossible to time but you sure as H do not want to be long when it happens.. M

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