Rumors Of The Death of Specialists Were Greatly Exaggerated
As
we said yesterday, the rumors of a pending collapse of one or more major
derivative specialists has not come to pass. Without the fear of such a pending
disaster, the market seems to have gathered itself and is trading firmly to the
upside.Â
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It may help those of you who follow our indicators to look at the following
examples of dollar-weighted movement into calls and puts to see how we position
ourselves to profit from this unique data.Â
   Â
In our Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating) example, you will
note there are roughly three calls trading for each put, but the dollar-weighted
numbers show the real money flow isn’t as bullish as a standard put/call ratio
would otherwise imply.Â
| Symbol
|
Call Volume
|
Put Volume
|
$W Call Vol
|
$W Put Vol
|
| ORCL
|
44,354
|
14,177
|
111,899
|
110,602
|
Similarly,
the Nasdaq 100
(
QQQ |
Quote |
Chart |
News |
PowerRating) action may seem
mildly bearish, due to the actual put/call ratio, but the but the
dollar-weighted action suggests a much more bearish 8:1 moneyflow into the
puts.Â
| Symbol
|
Call
Volume
|
Put
Volume
|
$W
Call Vol
|
$W
Put Vol
|
| QQQ
|
54,388
|
109,744
|
109,525
|
882,264
|
Meanwhile,
in Sun Microsystems
(
SUNW |
Quote |
Chart |
News |
PowerRating) we are still
seeing some active dollar weighted put action at nearly 6:1, versus the mere 2:1
actual put action. Please keep in mind that yesterday we saw unusually heavy
volume in SUNW, as an EXTREMELY LARGE customer liquidated 100,000 January 15
calls and 40,000 January 17 ½ calls. The sales knocked the volatility down from
78% to 68%.Â
| Symbol
|
Call
Volume
|
Put
Volume
|
$W
Call Vol
|
$W
Put Vol
|
| SUNW
|
31,074
|
12,341
|
44,567
|
226,401
|
Lastly,
the mini NDX, also known as MNX is seeing about 6:1 actual call to put ratio,
while the $ weighted moneyflow is substantially more bullish, sitting as it does
at 24:1.
| Symbol
|
Call
Volume
|
Put
Volume
|
$W
Call Vol
|
$W
Put Vol
|
| MNX
|
13,073
|
2,108
|
195,902
|
8,876
|
(1010WallStreet.com has licensed
the use of Hamzei Analytics proprietary options analytics)