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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 659.00

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Nov 21 4:00 PM EST

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To: Haim R. Branisteanu who wrote (1472)	12/12/1998 9:38:00 AM
From: Roebear	Read Replies (1) of 99985

Haim, I am going to respond to your question in anticipation of the education I may receive in responses, rather than any attempt at being other than a student here. I am not an options expert and have dabbled in index (OEX) options mostly to my pain not gain. So I tried a different tack. Yesterday I did the opposite of what you are talking about, playing OEX puts and checking a basket of stocks that I thought would show direction to the index. Basically I watched the stocks on 1 and 5 min charts and used MACD and especially Williams R to get the feel for where they were headed. Then I would watch how the index reacted. Basically I was in the OEWXN AM and out by 2:30pm, a little early (+2 pts vs 2 1/4 possible my basis) but the hairs on the back of my neck was saying there might be a little speech by someone like Big Al in October (those neck hairs saved me a real haircut then by 15 min). Said index rousing speech was supplied by WJC around 3:30. The option premiums dwindle whenever there is a pause in the indexes fall (puts) or rise (calls), anticipating a reversal. Now that is likely simplistic but it is just my observation. The index options move very quickly and it is best to sell a bought put or call just before it reverses rather than after the index has bottomed or topped. I was watching the stocks to tip the move in the index, exactly the opposite of what you are thinking of doing, but I guess it is a two way street. I am very interested in any comments. Just don't try to talk me out of my "nape" indicator, I'm keeping it! Roebear

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