Subject: Tech Stock Options
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To: lisa (35015 )
From: donald sew Friday, Feb 13 1998 8:49AM EST
Reply # of 35042
INDEX UPDATE
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I am still holding to my original position that today will be the first day of a small pullback, and I still feel that the pullback will be 150 points by next Friday's close, from today's high. My calculations were for a max pullback of 300 points but in light of this huge buying, I have to say that 300 points is becoming less likely. In light of the recent increasing volitility, I am not saying that from Tue to Friday next week that the today's highs cannot be pierced to the upside, but that we should see on a intraday basis a swing of at least 150 points off today's highs by next Friday's close.
For those who entered DJX PUTS at levels around 8300 should be able to break even at least or even make a very slight profit, but one needs to be very nimble to capture it.
For my MAR 84 and 83 PUTS, I will be holding and if this small pullback does occur I may strangle them. Do not think there will be much arguement that there is volitility now in the market, so a strangle should be ok. And still believe that there will be a bigger downside by MAR expiration in light of earning warnings to start in early MAR.
At the close yesterdayI added another small position in the DJX 84's FEB.
Right now the S&P futures are down about 4, when cash value is calculated in. Well, yesterdays futures were at about the same as now, but we all know how the day ended. I will wait until after lunch before doing anything, whether selling or buying.
Here are some keys that I will be looking for:
1) If market closes at it lows, the liklihood is that Tue's open should be down.
2) If market closes at its highs, the liklihood is that Tues's open should be up.
3) if market closes in the middle, the likihood is slightly in favor of Tues open being down.
For the next week, I expect the volitily to continue or even increase, and do not expect any trend to last more than 2 days.
Right now, I feel the only safe play is a strangle, so I will be attempting to either initiate strangles or exit my PUTS at breakeven or a slight loss.
Believe we all realise that there is huge buying at this time, so lets look at the negatives for today:
1) Asia was down with JAPAN and HK increasing its decline
2) Yesterdays afternoon rally was mainly in the DOW, and the NAZ/SPX actually lagged the DOW, but enough.
3) DOW's advance/decline was even indicating that yesterdays rally was not broadbased
4) NAZ's advance/decline had more declines
5) LRCX came out with some bad news blaming Asian FLU
6) Today is Friday the 13th. gggggggggggggggggg
7) 3 day weekend
8) expiration week with a situation where the CALL volume is probably
much higher than the PUT volume.
9) futures are down around 4.
10) A firm just downgraded the whole Bank sector
In light of all these negatives, the market will probably be UP gggggggggggggggggggg. So what can pull this market down with this great momemtum. I have one - if every analyst downgraded every sector and every stock - nah, it will still move up. ggggggggggggggggggggg.
Seeya
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