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The emphasis on what Ben said below is on the Change in sentiment.
Sentiment as measured by call to put ratios is often in synchronization
with price until near the end. I.E. rising price begets a rising Call to
Put ratio. Then a day or two or three before price peaks the sentiment
reading may peak and turn before price. Sometimes it is in sync with price
right through the peak or trough. That must be the pros or market makers or
those really in the know making that critical decision to effect stock
prices to effect liability/profitability of their options inventory.
Especially around expiration days you can expect price adjustments to
position stocks around strike prices, sometimes, often, even the OEX will be
cycled between strikes and edged over or under a strike in the last hour
where teenies become dollars. It is a fascinating thing to watch in
realtime where ten for one gains are possible. There is a lottery the third
Friday of every month with much better odds than government lotteries.
BobR
----- Original Message -----
From: <HARELSDB@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Thursday, November 18, 1999 10:06 PM
Subject: [realtraders] nasdaq {02}
> Pardon my ignorance, but, do sentiment numbers really give good primary
> signals? I tend to use price action and its derivatives to generate my
> primary signals and sentiment and breadth numbers as backup information to
> tell me that my analysis of the price action is probably correct or to
tell
> me to watch the price action especially carefully. What are the pros and
> cons of using sentiment numbers to generate primary trading signals?
>
> In a message dated 11/18/1999 5:41:44 PM Mountain Standard Time,
> Proffittak@xxxxxxx writes:
>
> << hello
>
>
> 20 days ago p/c ratio on above was 3/1
> 10 days ago as hi as 4 puts for every call
> today is FIRST day that it is 5200/5900
> a clear sell from an option trader
> trade well
> Ben >>
>
>
>
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