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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures -- Ignore unavailable to you. Want to Upgrade?

To: c-hl who wrote (8371)	11/12/2005 11:04:01 AM
From: Real Man	Read Replies (1) \| Respond to of 12411

Yes, that's what everyone is believing, and everyone is long, based on 2004 mega-rally. These rallies are done in the futures markets, with 15,000-18,000 e-mini contracts per minute purchases by some entity, throwing indices up. I don't know who that is, although I suspect it's the naked put shorts. All I know is that entity is able to stop the decline, when everyone else is selling, and it is able to initiate one when everyone else is buying. Expiry week is usually perfect for trend change. Perhaps, after expiration. That entity seems to be following the spiral (perfect manipulation? -g-). There may be some 10-25 SP points left to the upside, before the spiral issues a sell. I believe this is just structural support in the markets due to active options trading. So the entity could be many banks, market makers in the options market, following common delta-hedging. The fact of the matter is, if someone is short a lot of puts naked, counting on the Fed to inject liquidity, this creates a situation in the markets similar to 1987 portfolio insurance. Once the price action breaks put strike levels, the entity must sell SP futures, creating an avalanche of selling.