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Strategies & Market Trends : Canadian Options
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To: Terry Maloney who wrote (999)4/27/1998 7:26:00 PM
From: Porter Davis  Read Replies (2) of 1598
 
>>What's suspicious?

Two points raise my suspicion...when volume dries up on price recovery, it means only shorts are covering, no new buying is showing up. Secondly, you can almost set your watch by 'bear-trap' rallies; they start sometime after two o'clock, due to traders' unwillingness to carry a position overnight, and also the desire to be able to establish a new short position on the next day's opening. The daily inflow of mutual fund money which must be put into the market will allow this to work until the money flow reverses. The buy-on-dippers will eventually get burned.

I don't know anything about Ascend or the heavy put trading, but somebody is obviously making a market call. Did any large blocks of stock trade at the same time? What's the average daily option volume and what's the open interest? All these factors need to be known before trying to guess what's up, but where there's smoke, there's fire.

Happy trading.

Porter

(First Stones show for me was 1965. Cost $4.50. They played 20 minutes)
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