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To: patron_anejo_por_favor who wrote (165187)	5/10/2002 11:47:44 PM
From: Gut Trader	Respond to of 436258

Does Schaeffer hear the toilet running? schaeffersresearch.com GT@FlushMe baby.bowl

To: patron_anejo_por_favor who wrote (165187)	5/11/2002 12:42:52 AM
From: mishedlo	Respond to of 436258

I prefer to look directly at www.cboe.com. I back up my impressions with IQuato max pain site. One thing looking directly at CBOE lets you do is judge a possible BLOCK that may not be aparent looking at Iquato. For example, sometimes you see 100K calls and 20K puts at say strike 20 (this happened last Q on CSCO) Although Max pain was officially 20, one could look and see just how bullishly this was skewed and come to the conclusion that CSCO was NOT going to close over 20, without knowing full well what the target downside was. That is why CSCO dropped like a rock last Q on essentially the same bullsht news. Last Q there was too many alls on it, this Q it was too far below max pain. Period. End of story as far as I am concerned. IQUATO does not allow for such mental judgements. Look at the Calls on CBOE vs puts at strike 33. That rally might have gone another point on the QQQ but that is IT. Twice as many calls as puts at 33 and 35 (from recollection and I am not checking now this late in the evening). Yet MSFT has very few (relative to MSFT normal option volumes) that led me to believe that 50 on MSFT would be hugely defended but that an actual close at 55 might be doubtful. All that said I prefer to have max pain on my side and the Wed ramp got AMAT and CSCO above maix pain so I bought puts on those. MSFT was a better target on the ramp to 55. One of those things where you just could feel that MSFT woudl not close above that price. Now the question remains: was that the last attemt at a max pain rally this expiry? I would suggest yes unless AMAT BS news attempts another ramp. With zillions of puts building up on QQQ for June, I suggest next month could be a huge rally. I have tentative targets for such a rally either the day after memorial day, or the first week in June sometime. This rally depends on more puts being bought. Bears pile on. If zillions of calls keep getting bought, there will be no rally. The decline this month was severe because as we dropped J6P was buying calls all the way down. In the last 2-3 weeks Max Pain on the QQQ's dropped from 36 to 32. Calls were bought the entire way down. Guess what, we sank. Well we sank a bit too far (according to max pain) and we had that one day wonder snapback to allow "da boys" a perfect hedge on tons of crap right at max pain. Amazing how often this sht works. M