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Strategies & Market Trends : Tech Stock Options
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To: donald sew who wrote (53275)9/19/1998 1:02:00 PM
From: Lee Lichterman III  Read Replies (1) of 58727
 
Hoping you may be able to explain something that is bothering me.

I agree that options expiration probably held back the weakness in the market from showing itself. Most everything I look at as an indicator shows a fall overdue to at least the next step below us as you have pointed out. There are however two inconsistencies I see in a pool of allot more that point downward.

First, the weekly indicators are showing an at least short term bottom on many individual stocks and every index I track. Weekly stochastics are bottomed and poised for a bounce.

Second the Russell 2000 outperformed the larger indexes this week. I have not researched my next assumption thoroughly but I would assume the optionable interest on this exchange would be smaller than the larger indexes by virtue of their size. This "COULD" imply that in fact options were not as large a player in holding the market up as I previously thought.

If these inconsistancies were in fact a subtle clue to the short term market direction, we could be poised for another short term rally to the resistance areas on the indexes around 515 OEX and 1680 NASDAQ (Sorry don't have my DOW chart in front of me). This could fool allot of traders as these targets would temporarily breach the downward trend lines and 200 DMAs though I wouldn't expect the highs to last long.

Thanks in advance,

Lee
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