Higgenbotham wrote:
> Something I pasted in my notes years ago:
> "A very, very successful trader once told me, to watch the
> Thursday the week before futures/options expiration. If there is a
> major move that day, the week of futures/options expiration will
> move in the opposite direction."
> I've never paid much attention to this, as it is hard to define
> what a major move would be and, according to how I would see it,
> there's never been a major move on that day to take notice of
> until now. But we definitely had one yesterday, a major move
> down, which was "the Thursday the week before futures/options
> expiration". So according to this market lore, next week should
> continue up.
So if I understand what the very, very, very successful trader told
you, the market is going to shoot up next week. Is that what you're
saying? To 30,000?
I pasted that in my notes from someone who mentioned it on a message board and apparently the source is Marty Schwartz, who is a very, very successful trader.
The way I would approach this personally is to understand that last night's launch in the futures from 2400 and this morning's limit up move may have resulted from expiration related market dynamics that are moving this market against any fundamental information that speaks to the contrary, igniting a massive short covering rally.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
I have no position in the market now. As shown above I was long very small (3 lots) from yesterday's close and am now flat (the "0" shown in the "Net" column with 124 buys and 127 sells clearing the 3 lot position). I will try to take advantage of any expiration related dynamics next week to get short.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
Not sure about targets, but my guess is 2600, 2660, 2700, and 2720 may be places to take a look, and March 17 may be a date to look at. But it's all very uncertain.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
Higgenbotham wrote:
"A very, very successful trader once told me, to watch the Thursday the week before futures/options expiration. If there is a major move that day, the week of futures/options expiration will move in the opposite direction."
This might work more than not on a normal month, but I don't think this is a normal month and would not count on such a rule.
Higgenbotham wrote:
"A very, very successful trader once told me, to watch the Thursday the week before futures/options expiration. If there is a major move that day, the week of futures/options expiration will move in the opposite direction."
This might work more than not on a normal month, but I don't think this is a normal month and would not count on such a rule.
My approach is to not have a position at all here. But I might have half a (short) position at day end if they can run it massively higher into the close.
I just sold a little at 2600 and have orders in for a little more at 2610 and 2620.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
They did run it massively higher into the close, all the way to 2707.75. My approach was to sell 1 lot every 10 points up from 2600, and cover any sell 8 points down, then resell when it went back up, as shown here. Not all of it is visible due to there being so may trades that the window doesn't show them all.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
There was a selloff in the late day futures session and I adjusted positions into the weekend. Those adjustments start at 3:30 pm.
Therefore I left this session short 5 lots and still net positive in my account on the day despite a 200 point up day and a 300 point rally off the overnight futures low.
So this is how I personally used the information related to options expiration activity to trade my account today.
A 5 lot short position loses $25,000 every 100 points up.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
Higgenbotham wrote:Not sure about targets, but my guess is 2600, 2660, 2700, and 2720 may be places to take a look, and March 17 may be a date to look at. But it's all very uncertain.
The futures came back to about 2660 late day, then rallied about 25 points, the last trade at 4:00 pm was a bit above 2660.
My best guess now is that next week either the market will gap below 2660 and go down or it will float above 2660 for some time during expiration week.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
We know the stock market is still hugely overvalued on a long term basis. That's the absolute best guide to all of this that I can point to. The rest is minor details.
Enough happened at the end of the day today where I would not be mentioning the possibility of more bear market rally now (if I hadn't already done so).
I suppose that on a technical basis it could be argued that a 50% retracement to 2900 is the probable course short term. But since the market has never been as overvalued as it was at 3400 I'm not sure using 3400 as a measuring stick for a retracement has any validity.
In assessing my strategy at day end, given the volatility, the scale should probably have been set at 15 or 20 points instead of 10.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
