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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Bearded One who wrote (11652)	12/16/1997 3:31:00 PM
From: Joseph G.	Read Replies (3) \| Respond to of 18056

<<The purchasing of the puts temporarily drives down the price of the stock (the sellers of the put short the stock and buy the call to get an arbitrage)>> What sellers of call do? Joe

To: Bearded One who wrote (11652)	12/16/1997 3:44:00 PM
From: Cynic 2005	Read Replies (3) \| Respond to of 18056

My question is: What is the impact of the new influx of 'technicians' on the behavior of the stock market? You have seen the answer. Since about early last year, the market is up on technicals aided by liquidity from the foreign sources. Otherwise, there is no reason for Motorola to be trading at 90 nor for Intel to be trading at 100. But, often times most technicians tend to get wrong signals. They got on on October 18th (options expired) when the DOW closed down with the steepest down-tick recorded ever. And, some of them got a shock from the Hong Kong by next Thursday. I don't think technicians as a group will ever get it right. (Some savvy ones may.) If so, everybody will be making billions in commodities markets. I personally look at H&S patterrn for a fundamentally weak stock as a time to increase bet - not initiate it. Re. options volume, a few months ago someone on the BK thread mentioned that the options volume went-up in lock step with the volume on the exchanges. I don't think that the price of puts/calls has increased. Depending on the implied volatility (as measured by SD) of the stock they set the stock option premiums. not the otherway round. JMO. -Mohan