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I just posted asking whether anyone was interested in learning from the ground up about options. I know it's too soon to expect replies but I just picked this post up on Mishedlo's board. You may like to read it carefully because there is some indication of where the US market is going however, the main point about the excercise is if you understand it - fine, if it appears a bit mystifying then maybe an options learning course would be a good thing. I also have to add that Mish really knows his stuff about options.
Incidentally the US Options Exchange (CBOE) also have a very good course.

Here goes, and perhaps a surprising one.
No, not now, but perhaps soon.

We need panic first
A string of 3 days in a row of -1000 tick counts etc.

The criminals have unloaded at the top once the sheep stopped buying.
Expect numerous upgrades now while they are selling.
Just before the bottom, expect to see a bunch of downgrades.
Zeev has a published target of 1720. Perhaps we blow thru that, perhaps we bounce in front of it. At any rate it will close at least one nagging gap on the QQQ's.

I have no idea what will spark a rally.
I am pretty sure it will happen.
I do not know if it is at 1720, 1680, 1749 or 1600
If it does NOT come the bottom will simply fall out and we will blow thru the Sept "bottom" like it was melted butter.

Why the rally call?
It is dammed simple.
There simply are too many puts in the money in March
That is it.
No more
No less.
There is no more to this market, at this point in time, than criminal option acivity IMHO.

FA forget about it
TA forget about it
Watch the options, then watch for a sign of reversal.
It was all the crooks could do to manage a rally resterday to QQQ 37 1/2 max pain. They could not even muster enough gas to keep us there, so they shorted at that price and let it drop. Still they managed to hold CSCO and INTC right at max pain. Simply amazing performance by the crooks IMHO.

A look ahead
QQQ option interest
Strike - Calls first, Puts second
33 7K 19K
34 8K 60K
35 19K 100K
36 23K 94K
37 49K 163K
38 52K 71K
39 52K 71K
40 122K 100K

At every single strike from 33 to 39 the number of puts outweighs the calls by a staggering amount. There simply is no way in hell the crooks are going to let that many puts finish in the money.

The problem is: no one is buying.
The only way to induce buying is to first induce panic
The TRIN today was 4-5 all day.
Never seen such a huge trin before, sustained all day
Mammoth unloading by the institutions all day.
Undoubtedly they went short mammoth amount of stuff.
Once the distribution is fully complete. The bottom will fall off the bid.

Then: to cause a rally we need PANIC selling.
Have not seen it yet.
It is coming.
When it subsides BUY BUY BUY
I am serious.
There is no way in h*ll the crooks are going to let that many puts expire that far in the money.
Barring a nuclear or other disaster, it just ain't gonna happen.
OTOH, we have no rally until we see panic first.
Play the short side, on the watch for -1000 ticks, excessive pessimism, glee from the bears, Zeev's target of 1720 (which fills the gap up at 1750 or there abouts) and other indicators.

We will not want to be short at the reversal. It will not be pretty if we are. We probably do not want to be long much ahead of that reversal.

Let's watch for signs of the bottom so we do not miss it.
In the meantime, what stocks do we want to play on the rebound?


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