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Non-Tech : Simula (SMU) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Silvers who wrote (988)	3/11/1998 9:57:00 PM
From: Jaime H. Ayalde	Respond to of 1671

Ok Richard I'll bite, Message 3579217 Its still true: Technically +17.375 would be a Great Technical sign. Selling towards that number has provided shorters with equity. Closing over that point would make them cover. This last mini - impulse (14.75 low and 17.375 High) = 2.625 The maximum correction allowed for this impulse would be (distanced travelled) * (golden ratio) 2.625.618 =1.62 17.375 - 1.62=15.75 So here we are at the moment of truth. The short hedge has been Golden for arbs. No dud here. (if) As the stock trades at higher prices "Arbs" could start getting hurt as the appreciation on the converts will never be 1 : 1 with common. The delta on the converts is always less than 1. And the higher the price on the common, Delta will further be depressed. That is why the arbs make more money as the price declines, but the inverse will be also true.