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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: donald sew who wrote (19232)	7/2/1999 4:04:00 PM
From: jjs_ynot	Respond to of 99985

Don, Many/Most stocks are sitting above their max pain points (look at IBM for example). There is a high probability that the differential will be reduced significantly by expiration. Most likely scenario is a combination of reduced stock prices and closed option positions. Dave

To: donald sew who wrote (19232)	7/2/1999 4:11:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Don, i have no data on this to confirm where past closes above the maxpain level have been. but you can bet that if the market continues higher, maxpain will shift higher as well. many(including myself) were surprised by the Fed bias shift. i have noticed that such unexpected events often lead to the maxpain concept being invalidated for some time. this holds of course true for negative as well as positive events. as i have pointed out in a previous post, large call writers (mostly institutions) cover their exposure by buying the underlying basket of stocks, which pushes prices even higher and leads to fresh rounds of short covering in the stocks concerned, pushing them higher still. this seems to be the case right now and will go on until only the shorts that can take the pain are left(there are not many of those, i can assure you). once the short covering as well as the 'real' buying by the mutual funds is exhausted, some kind of correction begins. in the course of the correction fresh short positions are initiated, and so a kind of virtuous circle for the longs is kept going. it will be interesting to see if your class sell is invalidated next week...the market has now been up for 6 days in a row, i believe the record is 9 days. regards, hb

To: donald sew who wrote (19232)	7/2/1999 4:14:00 PM
From: HairBall	Respond to of 99985

donald: It seems my intraday reversal was on, but fell short of being the beginning of the retrace I was expecting. It seems the "big boys" were set on the main Indices closing at new highs today...<g> Regards, LG