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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (50972)	4/13/2002 11:38:44 AM
From: Justa Werkenstiff	Respond to of 99280

Mish: Re: "Things can change ...." Exactly. I have a period of weakness here for the next month after we bump up and it is a safe bet that this weakness will impact June expirations to a large degree. So while talking about a June bottom or rally is interesting, I am not sure anything much can be made of June now as it is too far out in the future for me, anyway, and it follows a period of weakness, I believe, that will have impact on the markets going forward.

To: mishedlo who wrote (50972)	4/13/2002 11:52:13 AM
From: ajtj99	Respond to of 99280

Mish, Paul Shread has mentioned that the average strike for June Dow futures is 10,400, I believe. That said, either that level will be defended, or abandoned and shorted hard if we get into the end of April / early May and we get too far away from it. That is reason alone to take the June QQQ Max Pain with a grain of salt and know that if things look weak, delta hedging will kick in to help mitigate the losses. The Dow futures were defended for most of last summer. When the average Sept. price, which I believe was about 10,200 or so, could not hold, they started taking it down in earnest in August. Watch for a repeat. Also, if all indices are weak, a situation like this could steamroll. The Dow is the key here, IMO. It has done a .214 re-trace this week, and may do a .236 next week to around the 10,030 level. If we get continued weakness, we could get a .382 down to the 9600 level to take care of the rising wedge from the pivot low near 9500. There was also a H&S with a target around 9300 that would satisfy a 50% re-trace. If the Dow goes below 10,000, the MM's are going to have to start to look at hedging that June futures position. That could take the Dow down and temper any enthusiasm. Dow broke a very important wedge this week, so unless it can do a flag thing, it may be finished but for a small DCB.