‘Bottom?’ Pickers Stake A Small Claim On Very Light Order Flow
Such
lousy action…Just as suspected, we haven’t seen lows yet in this
market. Sir Alan’s half-point slice was only enough to raise body temperatures
for a few moments. In my opinion, three-quarters of a point would have brought a
similar reaction. The short covering and euphoric buying may have lasted through
the end of the day, but we would have been back at it today.
The NASDAQ is now
back to levels seen towards the end of the Long Term Capital crisis (Russian
debt crisis) back in 1998. The question remains: Is there enough expansion left
in the economy to warrant coming back from these levels? Will lowering the Fed
rate back to levels at the crisis have enough impact? Will that help sell
Cisco’s routers? Dell’s PCs? Qualcomm’s
phones and phone parts? Only some time will help clear out those inventories and
thus the revenues will drag.
As I have said, the
overall direction will be lower to sideways over the next few
months. They’ll crush premium just after taxes are paid, May is always
that way and the summer will be a slow period, with folks hoping for recovery.
I’d go out and look at condors in May, June and July cycles. This is one
aspect we’ll be covering in our seminar in April.
Let’s have a look
at the daily numbers….
Pre-open
order volume was very light today. In the overall market, call buyers led
sellers at 5:4, and put sellers led buyers at 3:2.
(
VRTS |
Quote |
Chart |
News |
PowerRating) call sellers made
their presence felt, leading buyers 2:1. [CIEN|CIEN]
call sellers outnumbered buyers 2:1. [JNPR|JNPR]
call buyers were out big-time, pounding sellers 8:1.
[IBM|IBM] call buyers sellers
5:2.
First-hour order
volume remained very light today. In the overall market, call sellers and buyers
were nearly even, and put sellers led buyers at 3:2.
(
NT |
Quote |
Chart |
News |
PowerRating) call sellers made
their presence felt, leading buyers 8:1. [CHKP|CHKP]
call sellers outnumbered buyers 5:1. [JNPR|JNPR]
call sellers now lead buyers 2:1. [GE|GE]
call buyers sellers 7:3. [LU|LU] call
sellers made their presence felt, leading buyers 8:1
I think that you
need to look at the QCOM April 40/45/50 put butterfly, which can be had for
under $1. Or the CIEN April 40/45/50 put butterfly, which is trading around 3/4.
Selling premium
safely is the result of putting on butterflies; this is where I think some great
risk/reward plays are to be found today.
Please
keep firing those questions to me and I’ll try to get answers out to you ASAP.
tonys@tradingmarkets.com