Well, working that double long worked today... Just a thought, nothing to base it on really, but maybe we meander generally up from here until august 24, when the retail home sales come out. Not predicting of course, just a thought.
Tech is oversold but refuses to bounce. There is a lull in Tech in the last couple of days. Maybe the wait is for Thur AH when HPQ and DELL report (just in time for Fri expr). ADI reports on Tue. "NEW YORK (Market Intellisearch) -- Unusual volume of call contracts was traded today. There were 3,814 call contracts traded compared to the ten day average volume of 1,113 contracts. On the put side, 465 put contracts exchanged hands. Today's traded Put/Call ratio is 0.12. There were 8.20 calls traded for each put contract." http://www.marketintellisearch.com/articles/1040737.html CSCO and INTC did move up today.
a chart illustrating the bullish bias for expr week. but Aug expr week historically is actually not that different than an average non-expr week: http://marketsci.wordpress.com/2008/12/17/options-expiration-week-stock-market-strength/
The green curve makes sense. I know about it, and about its why. The red curve, I have not studied it or analyzed its reasons. Does anyone know? What are the numbers on the Y-axis?
the edge is huge and is amazingly stable over so many years. i really should be using it in my trading. it's great that you actually understand why it works. is it in the books or is it one of those secret formulas?
You're too late. This is just like the Christmas Effect. Once word of it got out, it no longer worked...
There were a few good theories in the blog post shortie linked to, but I first read about this in Barron's ages ago, and it was supposed to be due strictly to the hedging activity of options market makers: given that more puts than calls are usually traded, closing them out would give op ex week a bullish bias, and the week after, when new puts would be opened, would force the market makers to hedge these with shorts on their underlyings, and so would wind up being net bearish. We have a lot of sophisticated options folks here, so maybe one of them will come in and tell us if what I read as the reason why was true or not. I think the caveat in the blog post about small sample sizes would apply to any month-by-month breakdown of this bias. Our children and grandchildren will have better info on this than we ever will.