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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 671.910.0%Nov 14 4:00 PM EST
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To: Daflye who wrote (6313)2/13/1999 12:18:00 PM
From: Vitas  Read Replies (1) of 99985
 
>>>10 bagger downside play<<<

Daflye, I'm thinking so far that February expiration will provide some buoyancy to the market before the real slide begins. At this point in
the slammation pattern we need to work off the breadth oscillators so that they head back somewhere close to zero.

Options expiration is a very mechanical thing where all those
open contracts have to be unwound, and 10/12 times they are resolved to the upside. The beginning of the May '98 mini slammation
was postponed by more than a week after the 39 calendar day
count, at the May expirations

Furthermore, there seems to be a distinct pattern the last year where
important moves to the downside do not begin until the Tuesday after
expiration.

I would look to load up on March or April puts at the point the oscillators come back to zero and start to rollover. I would not go too
far out of the money, so that any kind of decline will be profitable.

However, the plunge of the a-d line Friday where it seems to have broken the congestion area from August '98, which was the left shoulder of an inverse head and shoulder pattern, may be an indication that the market wants to say bye bye now. I haven't reviewed Fridays's stats yet.

decisionpoint.com

Vitas
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