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

To: Les H who wrote (21211)	7/27/1999 5:08:00 PM
From: dennis michael patterson	Respond to of 99985

Oh that's way beyond me, I assure you!! I did a dell options trade for a friend today, and cannot understand why an in-the-money option didn't move with the stock!

To: Les H who wrote (21211)	7/27/1999 5:16:00 PM
From: pater tenebrarum	Respond to of 99985

Les, i have asked myself the same question when such disparities between QQQ and/or SPY and the underlying indices were discernible. i have noticed in the past that premiums/discounts on the QQQ often foreshadow moves in the underlying index. as for today, i believe short covering had a hand in creating the premium. the same happened when the Fed hiked the funds rate and announced a neutral stance. for a while the QQQ premium got completely out of hand as shorts scrambled to cover. regards, hb

To: Les H who wrote (21211)	7/27/1999 11:10:00 PM
From: John Pitera	Read Replies (1) \| Respond to of 99985

Les, I see that you picked up on that. I think that Heinz's reply very much hits the nail on the head. Short covering probably has something to do with it. If you view the QQQ as a toned down version of the futures , you should see premiums and discounts when the market gets to a short term extreme due to the ease of entry and exit in the QQQ.

To: Les H who wrote (21211)	7/28/1999 10:06:00 AM
From: Les H	Respond to of 99985

US DATA PREVIEW: 2Q GDP LIKELY TO SLOW, BUT BY HOW MUCH? 07:29 EDT 07/28 By Joseph Plocek WASHINGTON (MktNews) - The second quarter's advance estimate of U.S. real growth is expected to show a slowing, albeit to a pace that is enviable by historical standards. Along with slower growth, inflation is expected to remain low. Economists in the Market News International poll produced a median estimate of +3.4% for second quarter real GDP, along with a +1.6% chain index for prices. Real growth was put at +4.3% for the first quarter, with the price index at +1.6%. The expected slowing is seen as a positive factor for the bond market. "If Greenspan is comfortable with growth near 3%, the good news may be that he's already got it, at least for the second quarter," said Avery Shenfeld of CIBC Oppenheimer, who predicts second quarter real GDP will rise 3.2% "after a year of 4% average gains." Economists expect business capital spending and consumption to remain strong. Personal consumption expenditures were up 6.7% in the first quarter and are expected to have slowed only slightly. The typical estimate puts real consumption up more than 4%, as auto buying continued strong. The hot weather in the East earlier in the summer could boost utilities buying, which will be reflected in the services component of consumption. The slowing in second quarter growth should come from exports and possibly construction. Some of the slowing may be "payback in construction and other weather-sensitive activity after the mild winter boosted the first quarter," noted Marilyn Schaja, economist at Donaldson, Lufkin and Jenrette. "The wider than expected May trade deficit (-$21.3 billion in May) add(s) ... downside risk," said Jay Feldman of Credit Suisse-First Boston. While domestic demand is seen as strong enough to continue pulling in imports, while exports remain soft. If there is a risk in the GDP report, economists agreed it is from higher prices. The range of estimates for the chain price index are up to 2.2%. The price measures may have been "led by higher oil prices," said James O'Sullivan of J.P. Morgan.