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This chart has the end of day ratio of dollar calls to the sum of dollar
calls plus dollar puts for the 4 major option exchanges. It shows that on
8/28 the dollar volume of puts swamped the dollar volume of calls at the end
of the day and drove the ratio down to 0.15. That was the lowest level seen
so far in 2001. Then on 8/31 the low was tested again. This Friday could
be one of the more interesting expirations as the bullish divergence setup
might imply some upside if it were not for the continuing fear. The last
week of August does look suspicious since it is so far out of the 0.3 to 0.5
range since the May index high. Old timers know September can be brutal.
Old timers also know "Sell Rosh Hashanah and Buy Yom Kippur". Maybe the
ratio was just reflecting lots of insurance being bought before the climax.
Or maybe some parties did know about the terrorism about to be unleashed.
Maximum gamma leaverage would occur on Friday which should be about the time
the 600 Taliban clerics deliver a peace offering or write their ticket to
"nirvana". Since their vote has to be unanimous it would seem to be
preordained. Who amongst them would dare to vote to comply with US
requests. They are literally chosing life or death. My crystal ball says
they won't be able to come to a decision before the weekend, will find some
way to stall the decision, or agree and say yes he should go, but he has to
leave on his own volition.
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