To All
I am not so sure of playing puts yet because the next high people (Prudential, CNBC, Elaine Garzeralli, etc) are looking at is DOW 7300. The bears had plenty of chance to push DOW down in the past few weeks but it did not happen. The chart by OEX trader and Deaner do not tell the real story, any case both have been bearish for a long time.
If one were to look at DOW 6000 it hovered around that level for 15 days and then in the next 25 days it reached 6500. Similarly when DOW hit 5000 it shot through and in 45 days it was at 5500 and it hovered there for some time. Thus it is possible that DOW may go up fast (consequently the OEX) and then hover around the 7300- 7500 for the broader martkets to catch up. I would worry when the broader markets catch up right now the MM are pouring money into the hot stocks/ big caps only.
On Friday OEX was down probably for 2 reasons, profit taking and the long holliday, professional traders not wanting to keep positions open. With expirations next friday, we might see the retractment to 775-780 levels, and that would be a good time to enter. Thus my earlier post of if Mar 820 calls would be a good play or not. It is good if DOW is to keep thundering, but it may not be good if DOW hangs around the 7000 level for some time, in that case Apr calls may be good.
The OEX puts and calls were not really down that much in price, maybe volume.
Any thoughts
Kiri |
