HI Breeze,
I took off my sox and grabbed a magnifying glass. I count both the expanded Dow ABC and the Sox ABC flat took 17 days to decline from the top.
The DOW expanded flat has now met the required drop to below where the A wave ended.
Thursday we had a Zweig thrust indicator AND a record number of puts sold.
This is supported by another study that Hawk has shared where the weekly 10 day Aydis has reached the lowest level in the year.
I did an open interest study on the stocks in my portfolio and watch list. In general there was a huge amount of Call options that closed out to $00.00. I mean HUGE! Sometimes by only 2 cents below the next highest price unusually common. Of course the next up in price call ,had ginormous open interest.
This has resulted in a huge payday for the market makers.
Couple that action with a record level of puts sold on Thursday!
That's a set up for the next huge pay day with a seasonal rally going into Thanksgiving and Christmas.
Now with the month options expiring Friday. I'm always leery about the following Monday. When shares get assigned, they show up in your account on Saturday. The money paying part of the transaction happens on Tuesday. If you sold the put for the cash income, and DID NOT want to get the stock assigned you are nervous as new stockholder. Market makers know that and squeeze the new nervous nellie stockholders at the Monday open with regular down Monday morning opens after monthly expiration.
If that repeats tomorrow (like it often does) I'll be a buyer of some more shares.
I'm thinking it will be a gift before a nice runup into the end of year.
17 days of down market action is long enough to create fear and that is well supported by CNN extreme fear being very frequent this month.
The fear generating scripts have been political centered mumbo jumbo about the government being shut down, which is just that. Corporate profits came thru just fine, with the exception of businesses whose business model is aimed at low income earners and or government subsidies, which are being scrutinized and/or shut down.
We've lost the scripted fear of our government being shut down, and I think are due a nice Rally.
I love the DOW CLX with Keltner bands dipping below the midline ( that hasn't happened since last March), DOWCLXPPP, and SOX CLXPPP, all show deep moves down below zero - further support that the market maker's have had a good payday. and have accumulated discounted inventory - which is the one requirement needed before we all get into a price mark up phase otherwise called a rally.
Once again Hawkman's weekly 10 day aydis being the farthest below zero on the duration of his chart gives me confidence that an inventory of discounted shares is in hand.
Buy the DIP on monday premarket and/or at the open and get ready for a Happy Thanksgiving and a Merry Christmas!
Thanks go to all who share their work here on SI.
Bob |
