Nasdaq Falls, Order Flow Follows Suit
Well,
it happened.
The Nasdaq plunged through the 2000 mark this morning — as
many pundits had feared and predicted — thus breaking a barrier of at least
major psychological significance. Options
players remain nonplussed, however, (perhaps a sign that panic mode has
thankfully not settled in), as order flow remains light.
Volatility has spiked, commensurate with the downturn of the market, but
remains "in check" due to the tepid paper flow.
In the overall market, call sellers and buyers are even at 1:1, while put
sellers and buyers are even as well. Order
flow is registering an anemic 1.5 on our scale of 1.0 to 10.0, with 2.1 being
the 30-day moving average.
Here
are today’s numbers…
Pre-open
order volume was exceptionally light this morning. Overall, call sellers lead
buyers at 3:2, while put sellers beat out buyers at 3:2. In pre-bell
activity, [GE|GE]
call sellers outnumber buyers 7:1, while put buyers trounce sellers 3:2. [MSFT|MSFT]
call sellers led buyers 3:1. [IBM|IBM]
call buyers showed up leading sellers 4:1. [SUNW|SUNW]
call sellers dominated buyers 2:1. [EMLX|EMLX]
call sellers led buyers 4:1.
First–hour
order volume remained exceptionally light this morning. Overall, call sellers
and buyers are even at 1:1, as are put buyers and sellers. In first–hour
activity, SUNW
call sellers outnumber buyers 5:1, while put buyers and sellers are even.
[BRCM|BRCM]
call sellers led buyers 3:1. MSFT
and [EMC|EMC]
call buyers showed up leading respective sellers 2:1.
(
SEBL |
Quote |
Chart |
News |
PowerRating)
call sellers dominated buyers 2:1. BRCM call sellers led buyers 3:1.
Many of
you continue to write and ask about my upcoming seminar, here in Chicago on
April 21 and 22. A recurring theme in the
questions is whether or not I will be addressing trading strategies that work in
a downward market such as this. The
answer is absolutely yes. Indeed, the
seminar will have as one of its major focuses “repair strategies," that
is, how to batten down the hatches and turn these downward moves to your
advantage. I have said over and over in
my columns that the skillful options trader can make money no matter what way
the market moves. But this bears
repeating. I will be zeroing in on how we
can make these plunging markets work to our advantages.
Keep
those questions coming. And keep the faith! tonys@tradingmarkets.com