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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: epicure who wrote (20659)	6/18/1998 3:33:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Take a long hard look at a bear market, after the first big spike down they go into a tight trading range, check then the time premium put on the money. In short even with a down trend in place, the puts options GET so expensive that most of them leave very little profit after the spread and commissions. It's supply and demand, and in the down market you have every bear in the universe trying to buy puts. It's not as easy as one might think, unless you are in front of the curve you can get eat up. There is no good reason to think that the grope of people who originally write puts are dumber than the buyers. ( generally speaking ) But I can think of several reasons why the writers are likely to be smarter. Experience being the main one. Generally speaking most of the option writers have been in the market much longer than option buyers. --------------------- As for shorts the brokers, specialist, and market makers are the experts, and have the up to minute data to front run the issues, and the ability to pick off stop loses set to close. Jim

To: epicure who wrote (20659)	6/18/1998 8:09:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 94695

The cash flow into mutual funds is positive but very anemic: amgdata.com (click on "news") If previous patterns hold, tomorrow and Monday could be definite down days. As soon as cash flows go negative for 3-4 weeks in a row, the bull is dead (I think)--though after so many years of up movement we could have buying spells until mass panic sets in. Any time that mutual fund managers decide to increase holdings of cash from these impossibly low percentages, that could send it down, too. The real sell-off will be (I think)when, after about eighteen months of erosion, a lot of incestors will say, "Gee, I could have got 5% on my money instead of losing 25%!" And sell. Anyway, things look weak for the immediate future. So I think. On the basis of cash flow I did predict a possible recovery this week from the 200+ selloff.