Tech Tumble Sounds The Retreat For Options Traders
Ouch.
That about sums up my sensibilities concerning yesterday’s market
performance. ( I could, of course, have substituted some other four letter words
here, but then again, that wouldn’t
have been genteel.) If the markets were
music, we are back in the punk-rock period: noise, rage and revolution are in
the air. Guitars are being smashed on stage. Having plunged 6% yesterday, the
NASDAQ is hovering near 1800. The Dow is
rapidly approaching 9700. A Commerce Department
report notes that the last quarter’s economy grew at its weakest rate in 5 ½
years. Corporate earnings warnings drone
on like the background rhythm of a bass guitar.
As for options
practitioners, we can conclude that punk music is simply not their cup of tea.
Traders just won’t take their fingers out of their ears long enough to
move any paper. Order flow remains almost
non-existent: today’s levels register a scant 1.1 on a scale of 1.0 to 10.0,
with 1.9 being the current 30-day moving average. The brave few who are trading
at all are mostly selling premium. (Maybe
options traders are actually rap aficionados: it’s the same old tune,
repeating over and over). Although it
appears some bottom-pickers are out buying calls, especially in the techs.
[JNPR|JNPR],
(
SUNW |
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(
INTC |
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(
CIEN |
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witnessing a preponderance of call-buyers, albeit on only light order flow.
Call sellers lead
the band today, with put sellers playing back up.
Volatility has come in a bit from yesterday’s pop.
Our early morning search engines reveal some anomalous activity in
(
CRA |
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with “heavy†call buying. The same story exists in
(
OPWV |
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Let’s
take a look at our daily numbers…
Pre-open
order volume was very light today. In the overall market, call sellers led
buyers 3:2, and put sellers led buyers 3:2.
(
NT |
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call sellers outpaced buyers 3:1, while put sellers led buyers 2:1.
(
JDSU |
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buyers 2:1. JNPR call sellers dominated
buyers 2:1, while put sellers led buyers 3:1. call sellers came out
in force, leading buyers 4:1.
First-hour
order volume remained very light today. In the overall market, call sellers and
buyers were even at 1:1, and put
sellers led buyers 3:2.
(
CSCO |
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sellers outpaced buyers 2:1, while put sellers led buyers 2:1.
(
EMC |
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trounced buyers 4:1.
(
DELL |
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sellers dominated buyers almost 6:1.
(
MSFT |
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I am informed from
the command at TradingMarkets.com that my seminar is filling up rather quickly.
That is a nice vote of confidence from you readers.
Gracias. Due to the unique
circumstances of the markets, I intend to devote a good amount of
time to question-and-answer sessions in the seminar.
Many of you have written with specific questions that you would like to
see addressed, and not surprisingly, the contents of these questions are often
similar. I want to make this seminar a
true workshop, wherein each one of you can “graduate" and immediately
improve his trading game significantly. This
will be a “no-nonsense†practical approach to developing trading strategies
that work. In order to optimize the
content of the seminar, I urge
each one of you to write me with specific and detailed questions that you want
to see answered.
Keep pumping me
those questions: tonys@tradingmarkets.com