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To: put2rich who wrote (47690)	8/17/1999 4:05:00 AM
From: John Graybill	Read Replies (2) \| Respond to of 53903

Yep, short again at 60 1/2 going into the close. I covered and expected an immediate bounce for many reasons: - A bounce after a gap is filled is a very usual occurrence. - 62 was an area of real congestion on the way up, and we ran straight through it today. Even on a hard-fought break of such a congestion area, a retracement toward that area is (still) usually the next destination. - Note the bounces off 62 the other day and 62 1/2 twice today. Support points like that tend to become resistance points when approached from the other side. - Those who see the magic 0.618 ratio everywhere would say that today's drop from 65 1/2 to 60 would retrace 0.382 of the drop to peak again at 62.1. - I forgot to note, as I usually do, that the Fri/Mon before expiration is usually a fake panic to sell a bunch of puts that are intended to expire worthless. Note the explosion up in DJII, SPX, etc. since Thursday. So They are a little early this time in the big indexes, and possibly right on time for MU. - In that same vein, a Private Message suggests blabbing up Goldman Sachs' put purchase is a little suspicious, eh? If the noise about the put purchase becomes a self-fulfilling prophecy (as it possibly has), their Sep put buyer could have sold some August 60 puts today at the low (he had plenty of time) to collect some hot-air premium. Note that they were worth close to two bucks with only four days to go. Then on Friday, he can buy 'em back for 1/4 (assuming we zero in on 60 by then) and sell some Sep puts (55's?) against their 70's. At that point, he would have pulled most of his original six bucks off the table and be left with upside of 15 points per contract. - DJII action today says that inflation number coming out tomorrow will be reason to run it up another hundred points at the open. DJII traded within 20 points of its close until 45 minutes before the close, when it ran over 100 points nearly straight up. If that is indeed the case tomorrow morning, pretty much everything goes up with it. - The right play for like the past three weeks has been to go home flat or long and wait to short until sometime in the first half hour of the day. - The panic slide stopped right on the hour, and right on 60, on the biggest one-minute bar of the day. When you get a bar during the day that's bigger than the opening bar, you gotta assume that They don't intend that bar to be undone. On the other hand... MU didn't run up in the last 45 minutes, or even after 1:45, when SOX was forming a sharp bottom and marching back up. Is that enough to negate all of the above? Probably not. I might have to gnash my teeth again for the first half hour of the day, but I'd be kicking the cat if tomorrow turned out to be the day that I went home flat and MU went straight down for two hours without a shortable uptick on a market-wide tankeroo, or if MU opened down four on an overnight downgrade (unlikely, though -- Goldman wouldn't waste a downgrade before a big market-moving inflation number).