Another Boring Day in the PIT
I walked into the pit this morning thinking, in the wake of CSCO’s earnings and the upward performance in Globex, that we would have some increased trading activity — was I ever wrong.
For what seems to be a new trend, there has been very little institutional interest in the trade. This is being seen across the options sector as well. How does one trade these types of days? Very cautiously or not at all.
Locals have dominated the action over the past few sessions and that leads to a choppy, thin trade. I like trading when institutions are involved because they have business that needs to be done. When they are quiet, it leads to locals trading with each other, and this is a tightrope for all involved.
As for the market, I think the doldrums will continue in terms of activity. However, the main thing I noticed was the absence of fresh buying near our session highs at 1498 — in fact, the premium was only at 6.00, or 1.50 below fair value up there. The smart money — option traders especially — think we are at the high end of the range. I am apt to agree. However, this does not mean straight down from here. It does mean I am not expecting to see the buyers step up and take us over 1510 from here.
As for the rest of today — keep it close to the vest, with an eye towards 1481.