Another thing that was not mentioned was the simple mechanics of expiration week. Let's not forget that during options expiration, there is a clear agenda to keep stocks from expiring through specific strikes. Coming into this week the "MaxPain" was 1100 SPX and lo and behold the market settled within about 5 handles and straddled that level for 3 days. I think the Tuesday gap higher(similar to April 16th-April expiration cycle) put in motion a very neutral market where shorts were not going to be too aggressive in their selling because technically we broke above 10 Day line resistance and bulls were just picking at the pullbacks and we just kind of "chopped higher". Someone also mentioned that the dollar is not confirming this move, which I think says alot. It is also worth noting that last expiration cycle we had a very choppy 3 days following the April 16th spike, with a news shock on April 18th when that plane went flying into the Pirelli building in Milan, only to be followed by more chop around the 1125 pivot for that expiration cycle. The following Monday we gapped lower and set in motion a week long decline that was straight down with hardly a retracement. Not saying this would happen again, but I would never make any "macro" analysis based on these expiration runs. They have proven over the years to be real fakeouts alot of times...
Mr. Vulture, I agree totally. I try not to 'predict', but I've noticed over the years that the Monday following expiration is almost always opposite the Thur/FRi direction. Usually the buying (or selling) power is used up going into the expiration, causing a reversal on the next Monday. But don't try to predict, just trade what's presented to you....
Short interest NASDAQ: http://www.viwes.com/invest/shorts/index.html NYSE: http://www.trading-ideas.com/si/si.asp?SE=NYSE I suppose cruising through the put options would be worth a trip too but I usually do that after I'm already targeting a stock.
Just a slight calculation while we are playing. 11000 - 10353 = 647 DOW points = about 80.87 spoo points. 1105 + 80 = 1185, "only" 10 points above the double top on the daily spoos at 1175. That will be very interesting times if we retest that. nitro
What is really annoying is a week ago or so last Wednesday...when we had that ridiculous pop thanks to Cisco....Thursday & last Friday saw major pullbacks.........everyone and their stupid brother came on CNBC out of the woodwork proclaiming we ARE DEFINITELY going to test the lows from Sept. very soon. This week especially being an options expiration week looked pretty gloomy. But actually if you would have checked the VXN indicator that was breaking through 50 & the so called ass jacks on television, you would have seen a classic contrarion indication of a major bounce. To add salt to the wound, this has happened many times in the last 18 months. Whenever that VXN breaks 50 and the bond markets are selling down, its amazing how like clock work the Nasdaq rallies furiously. THe true test will be this week. The Nasdaq will have to make a run to close above 1750. Once we get past here, technically speaking, a temporary floor could be in place for the next leg up. IF not, if the Nasdaq shows signs of weakness on heavier volume and fails to close this gap range of 1730ish to 1750ish...forget about it...back up the truck and buy some puts, we will hit temporary short term lower lows on the comp...............................