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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (10085)	6/6/1998 5:39:00 PM
From: Ben Antanaitis	Read Replies (3) \| Respond to of 64865

Sonki, Where to start.... Well, I use the Max-Pain study to see if there is a correlation between the Max-Pain point and where the price of the stock is on expiry day each month. This is indeed a short term indicator. Too far out, and not enough of what the options MM's are betting on will show in the graphs. Also, too far out and successive breaking news events that may, and can occur, will skew the results you have been projecting. In this case, being June and expiry two weeks away, the July open interest will come into my focus in just over two weeks. I know of no sources for historic data for open interest volumes so I could not back track to see what the July Max-Pain would have been based on March, April, May open interest volumes. Yes, the data is all manually entered, by me, for the calculations. Another question about your suggestion to only study the July Max-Pain point... what are you going to look at in August. September, October, etc.? There will not be open interest for July 1999 to look at. Options other than January aren't issued out a year ahead. With regard to the EZ-PnF charts, point and figure charts do not have time as a dimension or attribute in their patterns or support/resistance lines or price objectives. So having a 52.25 p&f price objective and having the price of SUNW hit 42.5, or stall at 45 for six months, are all in harmony with each other. The current EZ-PnF chart for SUNW would not change at all if SUNW dipped and was trading at 42.5 in two weeks. In fact, SUNW could trade in the range 45 3/16 to 41 13/16 and the current EZ-PnF chart would not change at all. The Max-Pain point of 42.5 just says that the options MMs will be motivated to 'guide' the price of SUNW to 42.5 on June 19th. Unless news breaks or Greenspan does something to shake the world etc. Ben A. ez-pnf.com