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

To: pater tenebrarum who wrote (35375)	12/17/1999 7:45:00 PM
From: KM	Read Replies (2) \| Respond to of 99985

Some commentary on the late day slide and reasons why: Although many traders were swamped amid the avalanche of volume -- and thus unable to comment at length -- everybody's favorite Allen Iverson (a.k.a. "The Answer") to the "why stocks faded" question was the expiration of index futures and options and stock options. Many arbitragers "bought cash and sold combos" during the day, said Monte Hord, vice president of program trading at Cantor Fitzgerald, referring to synthetic futures in the S&P 100 Index. When the combos "rolled off" at the close, the arbs had to sell the cash to maintain they're hedged position, thus putting "downward pressure" on the market. In addition, "a lot of the shorts were already rolled into next month" and thus weren't there to take the other side of the arbs' trades, Hord said. According to two market makers in options, heavy buying into the futures market late on Friday forced investors to redeem some of their stock holdings and raise cash for their purchases. "That's what made the Dow jack around towards the end of the day," said one American Stock Exchange-based options trader. Meanwhile, Bob Basel, director of listed trading at Salomon Smith Barney said the late-day slide "had more to do with the rebalancing" of the S&P 500 and Nasdaq 100 after the close than with triple-witching. (from thestreet.com market roundup) Ya'll have a great weekend.