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Post expiration week is generally a "giveback" week when E week is promoted
to the upside. Much of expiration related phenomena has nothing to do with
investing or valuation. It is more related to unwinding hedges and the
mechanics of the vested interests of market makers and specialists. For
example, on any typical trading day, HALF of the volume in optionable
stocks has to do with hedging positions, not investing. About all I can say
about the catch-up, is the spread will narrow one way or the other. Zone
probabilities are on the overbought side. Asia and Europe are not ending
on a strong note by any means. Zone Timer attachment is not as extremely
overbought as it gets in an uptrending market. Nevertheless risk on the
long side has increased and as an option trader some consideration should
be given to a snap back. McClellan issue and volume oscillator are on the
verge of being overextended on the upside for and are facing trendline
resistance within one day. Again, the odds favor some pullback this week.
BobR
http://www.oextrader.com
At 10:05 PM 1/19/98 -0800, John Chamberlin wrote:
>Realtraders,
>
>Does anybody have a grasp or sense of how the market
>could adjust itself from the long weekend?
>
>The S&P traded a regular session on the GLobex on
>Monday and an abbreviated session on Monday and is
>now open again.
>
>Currently the Globex shows the S&P up 1 or 2 points
>or so. However, March and June Futures are both 10
>points above the friday close. Effectively we have
>the potential for a limit up open on a 3 point S&P
>move.
>
>How will the Dow, NYSE, etc. react to not being open?
>will they simply pop on the open to correct the
>discrepency?
>
>I don't think there is any other holiday or situation
>where we have to contend with the cash markets being
>closed for three sessions while the futures trade.
>i.e. Sunday, Monday, and tuesday.
>
>John C.
>
>
>
>===
>john@xxxxxxxxxxxxxx
>
>
>
>Commit yourself to quality from day one...
>It's better to do nothing at all than to do something
>badly.
>--Mark H. McCormack
>
>
>
>_________________________________________________________
>DO YOU YAHOO!?
>Get your free @yahoo.com address at http://mail.yahoo.com
>
>
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