[RT] Sigma Trader Commentary for November 13, 2000

["dbisny" <dbisny@xxxxxxxxxxxxx>]

Who  IS  
this guy? Great stuff..... 
 
 
Sigma Trader Commentary for 
November 13, 2000 <A 
href="mailto:bobrabcd@xxxxxxxxxxxxx";>bobrabcd@xxxxxxxxxxxxx 

<A 
href="http://www.oextrader.com";>http://www.oextrader.com
Friday proved once again that it isn't wise to fade the cumulative volumes <A 
href="http://www.oextrader.com/sigma_trader/CVnaz.gif";>CVnaz  <A 
href="http://www.oextrader.com/sigma_trader/CVnya.gif";>CVnya <A 
href="http://www.oextrader.com/sigma_trader/CV200day.gif";>CV200day  <A 
href="http://www.oextrader.com/sigma_trader/CVnaznya.gif";>CVnaznya .  
Short term sells were given Wednesday against the bearish backdrop of the longer 
term CV.  It is possible and justifiable to trade the short term in a 
counter trend trade against the longer term.  That is what the 
various  <A 
href="http://www.oextrader.com/sigma_trader/SENTIMENT.gif";>Sentiment  
PCratio <A 
href="http://www.oextrader.com/sigma_trader/PutVolume.gif";>PutVolume 
indicators are telling us is shaping up.  Thursday commentary suggested 
that as these psychological stress indicators reached  toward Buy Call 
levels, that there might be a bit more work to be done.  Friday's 
followthrough clearly confirmed that concern and the consensus now says that we 
could be within one or two days of a super call trade.  Infact the markets 
could turn on a dime on Monday/Tuesday after the next batch of margin calls are 
met. My preferred attack would be to buy near the money November $5 calls and 
out of the money December $2 to $3 calls into weakness, preferably at the lower 
green  Sigma 
level or a test that doesn't reach it.  That would be 710 to 712, but 
during expiration week there is a propensity for the OEX to favor 5 point 
strikes as support and resistance, so there might be a pause at 715. I would day 
trade the Novembers(buying at lower sigmas and selling at the pivot or upper 
sigmas) and position trade the Decembers.   Both  <A 
href="http://www.oextrader.com/sigma_trader/CODInaz.gif";>CODInaz and  
CODIoex  
have dropped into the momentum and market thrust Buy zones.  The reversal 
will occur with TRIN and TRINQ dropping below Friday's levels and particularly 
below 1.0 to 0.8 and you would expect the advancing issues - declining issues 
and volumes to turn positive.  That would turn the cumulative volume 
indicators up.  To make the intraday buy complete you would see TICK 
spending more time above zero than below and you would see the PREM spending 
more time oscillating between fair value and buy programs than between fair 
value and sell programs.  The caveate here is the  <A 
href="http://www.oextrader.com/sigma_trader/MOSS.gif";>Modified Option Strategy 
Spectrum has dropped back into the neutral/oversold zone and the  <A 
href="http://www.oextrader.com/sigma_trader/OEXLD.gif";>OEXLD and  <A 
href="http://www.oextrader.com/sigma_trader/NDXLD.gif";>NDXLD line dot 
crossovers are still in sell mode.  Obviously the intraday turns will be 
ahead of the end of day data and because of the last two huge daily ranges it 
will take some work to get line/dot crossover buy signals to trip 
off.   Implied volatility on the  <A 
href="http://www.oextrader.com/sigma_trader/VCycles.gif";>VCycles is above 30 
manifesting the fear that occurs near price lows. So, the cards appear to be 
delt for the next hand to be a Call.   ----- Original 
Message ----- 






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