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Re: Open Intrest, P/C ratio



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<DIV><FONT size=2>
<DIV><FONT size=2>Well according to past pattern the OEX should be selling off 
at this point, but you know that story about the best layed plans of mice and 
men.&nbsp; So far everything has fallen into place except the cooperation of the 
OEX.&nbsp; Usually the cycle is something like this.&nbsp; </FONT></DIV>
<DIV><FONT size=2></FONT>&nbsp;</DIV>
<DIV><FONT size=2>1. Triple exponential smoothing crosses before price peaks and 
before the CBOE Total Equity C/P peaks.</FONT></DIV>
<DIV><FONT size=2>2. Total Equity C/P peaks and turns down as price continues 
climbing reflecting change in sentiment.</FONT></DIV>
<DIV><FONT size=2>3. Price then turns down as latecomers are left holding the 
bag.</FONT></DIV>
<DIV><FONT size=2>4. SMI as measure by Bill Blau Stochastic Momentum crosses 
over.</FONT></DIV>
<DIV><FONT size=2>5. Put options then increase in value if time decay and 
volatility do not work against you.&nbsp; Of course if the mkt is selling off 
then VIX will be increasing and work in your favor.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>Another chart not shown that uses volume and open interest has 
the same pattern and sequence.</FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>The EquityCP.gif&nbsp;chart illustrates the above sequence 
that works quite often and another chart of the 720 July put for gunslingers 
entered on today's failed rally.&nbsp; A third chart is attached showing 
Thursdays target range and Friday's probability expectations.&nbsp; Say we get 
some selling tomorrow then the lower green cone zone is an average expectation 
and a red one would be one that causes some concern for the bulls.&nbsp; Say you 
buy two contracts, and we get some selling then dump one at the green cone and 
move the stop there for the second one and hope you get a drop to the red 
one.&nbsp; If not then exit the second near the stop.&nbsp; This strategy will 
most likely be aborted before the close tomorrow since there is a large 
contingent that believes in the "buy the Friday close" of pre-expiration 
week.&nbsp; Hopefully the byte size of these three.gifs makes it through the 
system.&nbsp; </FONT></DIV>
<DIV>&nbsp;</DIV>
<DIV><FONT size=2>Good luck trading,</FONT></DIV>
<DIV><FONT size=2>BobR</FONT></DIV>
<DIV></FONT>----- Original Message ----- </DIV></DIV>
<BLOCKQUOTE 
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
  <DIV 
  style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> 
  RAY RAFFURTY </DIV>
  <DIV style="FONT: 10pt arial"><B>To:</B> <A 
  href="mailto:realtraders@xxxxxxxxxxxx"; title=realtraders@xxxxxxxxxxxx>Real 
  Traders</A> </DIV>
  <DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, July 08, 1999 7:26 
  PM</DIV>
  <DIV style="FONT: 10pt arial"><B>Subject:</B> Open Intrest, P/C ratio</DIV>
  <DIV><BR></DIV>
  <DIV>Hi RT's,</DIV>
  <DIV>&nbsp;</DIV>
  <DIV>I'm curious if there has been any unusual changes in the P/C ratio or 
  open interest after the fed meeting?&nbsp; And if so, how will it effect 
  option expiration week?</DIV>
  <DIV>&nbsp;</DIV>
  <DIV>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; 
  &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; 
  &nbsp;&nbsp;&nbsp; Good luck and good trading,</DIV>
  <DIV>&nbsp;</DIV>
  <DIV>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; 
  &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; 
  &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; 
  Ray Raffurty</DIV></BLOCKQUOTE></BODY></HTML>
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