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Begin part 2 of 2
SUBSCRIBER QUESTIONS
Q: Could you please explain how you know about the quantity of put and call options on the QQQ and why the market makers want to stave off rally attempts?
A: You can find the open interest of puts and calls on the QQQ, OEX, and any stock or other index at several places on the web. One is www.pcquote.com. You can get a quote on options and it will show you the open interst as well for each strike and for each month. When looking for potential impediments to market or individual stock moves close to expiration, look at the current month and the call and put options that bracket the current price. Look for the big open interests. Those are the strikes that could act as an impediment.
We say could because it is hard for any individuals, even acting as a group, to hold the market tide back if there is a strong surge of interest in either direction. News, positive or negative, could push it past those levels and the market makers could not stop it.
Why would they want to do that? Because market makers take on huge amounts of risk in order to provide liquidity to the market. They are not just matchmakers, they move in and buy in their own account then turn and sell. Or they sell and then turn and buy. If things slow they are theoretically supposed to step in and buy or sell to get things moving. Again, they are taking on great risk and though they try to stay as neutral as possible, they are often on the side against the majority of open interests as they are there to help make and provide a market. Thus, if they can spread a little loving influence when things are slow, they will try to do so and keep the expiration close at levels where they will come out ahead by virtue of where the indexes close. In other words, their call and put positions work to cancel out any loss if there is no big price swing. That is why we see some pretty strange trade at times on expiration as investors try to roll out of posititions to give themselves more time and market makers attempt to stay market neutral.
SEMINARS ON CD
http://www.stockseminarsonline.com
This is Jon Johnson's own site devoted exclusively to seminars designed to teach you what you need to know about the stock market and stock movement and how to take advantage of those moves without incurring the usual high costs of travel and related expenses usually associated with seminars.
Good movers Thursday: ANT; BEV; HOTT; MDS; TTEC
Continuing plays ready to move: CATS; DJO; EPIC; GGNS; QADI; VLGC; PFGC; SFNT
CONTINUING PLAY LIST: This week the summary table breaks out the upside and downside plays into different sections labeled accordingly.
LEGEND
DATE: date play first appeared on report.
PLAY: Denotes the type of pattern or play.
Upside play types: A Wedge=Ascending triangle/wedge; BO=Breakout; Cup=Cup base; Cup hdl=Cup w/handle; DB hdl=Double bottom w/handle; Dbl btm=Double bottom; Flat=Flat base; FlyPlat=Flying Plateau; Pennant=Pennant; Rv H&S=Reverse head & shoulders; Saucer=Saucer base; Test 18=Testing 18 day MVA; Test 50=Testing 50 day MVA; Test BO=Testing the breakout (could be 10 day MVA test, etc.)
Downside play types: CCall=Covered Call; DWedge=Descending triangle/wedge; Dbl Top=Double top; H&S=Head & shoulders; Put (generic downside);
PIVOT=Buy point
Tgt=Target stock price for the play. Applies to stock and options.
Vol=Volume for the most recent session.
TgtV=Target volume to enter the play.
Stop=Stop advisory point. This is advisory and we may or may not exit a play if it hits this level depending upon market conditions.
Upside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
^OEX 11/06 A Wedge 511.79 -5.03 523.15 545 294K 650K 518.55
Current. Lost yesterday's gain closing above support at 510 on lower volume.
ANT 11/10 A Wedge 36.8 +0.85 35.58 42.45 474K 561K 34.08
Current. Great move up on stronger above average volume. Continue to move up the 10 day MVA.
BEV 11/12 Cup 7.65 +0.13 7.25 8.94 1.7M 1.7M 6.72
Current. Continue to move up the 10 day MVA on above average volume. Tapped 7.85 at the high, but gave some of it back.
BRKS 10/29 Cup 23.25 -1.22 27 32.38 1.1M 1.4M 25.55
Exited. Fell below the 50 day MVA on strong volume.
CASY 11/06 Rv H&S 16.68 +0.08 16.37 20.12 197K 200K 15.72
Current. Gapped down at the open and rallied for a nice move as the stock moves up the 10 day MVA on stronger volume.
CATS 10/27 Test BO 7.5 +0.1 7.58 9.12 191K 145K 7.05
Buy Not Issued. More volatile with 7.21 at the low (18 day MVA) and 7.75 at the high. Stock is moving up the 10 day MVA on strong volume surge.
CKSW 10/25 Test BO 4.32 +0.03 3.61 4.58 297K 300K 3.57
Current. Tapped 4.09 at the day's low and rallied showing a doji on below average volume. Stock continues to climb the 10 day MVA.
CY 11/17 Test 18 21.7 -0.23 22.02 26.45 2.5M 4.6M 21.45
Buy Not Issued. Continue to make a lateral move between the 10 and 18 day MVA on below average volume.
CYMI 11/06 DB hdl 43 -2.08 49.39 59.22 1.9M 2M 46.25
Exited. Plunged lower closing below the 50 day MVA on stronger above average volume.
DCGN 09/20 Test BO 8.17 +0.06 4.32 5.38 537K 315K 7.29
Current. Tested the 18 day MVA and rallied on lower volume. Still in good shape.
DJO 09/11 Cup 23.83 +0.43 14 16.45 94K 100K 21.63
Current. Continue to move up the 10 day MVA on average volume.
ECIL 10/02 Test BO 5.51 -0.45 4.3 5.22 445K 300K 5.65
Exited. Issued trailing stop as stock thudded down to close below the 18 day MVA on stronger above average volume.
EGHT 10/30 Cup 3.59 -0.11 2.15 2.91 690K 823K 3.06
Current. Pull back on low volume. In good shape. May be ready for next move up.
EMBT 10/06 Flat 14.74 -0.11 11.24 13.38 161K 350K 14.48
Current. More volatile with 15.30 at the high and 14.25 at the low (18 day MVA) showing a doji under the 10 day MVA on low volume. May be ready for move up.
EMBT 07/26 Cup hdl 14.74 -0.11 9.33 11.12 161K 400K 14.48
Current.
EPIC 11/15 Flat 11.1 -0.01 11.68 14.06 304K 522K 10.81
Buy Not Hit. Volatile with 11.20 at the high and 10.81 a the low (18 day MVA) showing a doji on the 10 day MVA. Making a lateral move along the 10 day MVA
EVCI 10/20 Cup hdl 5.48 -0.03 3.4 4.38 139K 125K 4.55
Current. More volatile with 5.70 at the high and 5.38 at the low on below average volume. Beginning to make a lateral move above the 10 day MVA on below average volume.
GBN 10/22 Cup 2.23 -0.02 1.86 2.42 439K 300K 2.02
Current. Tested the 10 day MVA and rallied on stronger above average volume. Still in good shape.
GGNS 11/19 Test 18 6.59 +0.09 6.64 7.98 266K 625K 6.16
Buy Not Issued. Tapped 6.82, but could not hold the entire gain on higher, but still below average volume. beginning to make the move back up the 10 day MVA.
HOTT 11/19 Test 50 28.61 +2.01 28.55 34 2.5M 1M 27.34
Current. Entered the play as the stock exploded higher on strong volume surge. Tapped 29.30 at the intraday high, but gave some of it back.
KEYN 11/17 Flat 12.07 +0.07 12.52 15 66K 200K 11.65
Current. Gapped down to open below the 18 day MVA and rallied on below average volume. Still in the pattern.
MDS 11/09 Cup 14.35 +0.22 14.28 17.21 169K 120K 13.63
Current. Tested the 10 day MVA and rallied making a nice gain as the stock move up the 10 day MVA on stronger above average volume.
NMGC 11/11 Cup 3.18 +0.04 2.91 3.78 432K 303K 2.68
Current. Narrow trading range showing a tight doji on above average volume. May be ready to move up from here.
NOOF 11/01 Cup hdl 8.37 +0.07 5.27 6.32 462K 319K 6.24
Current. Continue to move up the 10 day MVA showing a doji on much lower, but average volume.
NOOF 10/25 Cup hdl 8.37 +0.07 4.78 6.21 462K 280K 6.24
Current.
NSIT 11/15 A Wedge 17.81 +0.45 19.06 22.88 285K 819K 17.94
Buy Not Hit. Bounced off the 50 day MVA and rallied on low volume. tapped 18.08 at the intraday high on below average volume. Looking for another bounce up.
NUVO 11/18 Test 18 3.51 -0.07 3.81 4.88 557K 1M 3.53
Buy Not Hit. More volatile with 3.63 at the high and 3.42 at the low showing a doji on the 18 day MVA on higher, but below average volume.
NVLS 11/19 Test BO 41.82 -0.91 43.38 51 7.1M 10M 41.88
Buy Not Issued. Gapped down at the open then went up to tap 43.43 at the day's high, but gave it all back closing below the 18 day MVA on average volume. Needs to hold here and rebound or will drop.
ONNN 10/28 Test 50 5.13 +0.16 4.65 5.88 4.3M 1.7M 4.58
Current.
PDYN 09/29 DB hdl 4.1 +0.04 2.55 3.24 226K 450K 4.22
Current. Tested below the 10 day MVA and rallied on strong volume. Beginning to move back up the 10 day MVA.
PLXS 11/03 DB hdl 17.34 -0.61 19.06 22.75 350K 528K 18.23
Current. More volatile with 17.83 at the high and 17.20 at the low showing a doji on the 50 day MVA on stronger volume. Needs to hold here and rebound.
QADI 11/12 Flat 13.56 +0.37 13.54 16.22 142K 298K 12.44
Current. Tested the 10 day MVA and rallied as the stock moved up the 10 day MVA on below average volume.
RWY 11/04 Cup hdl 6.73 -0.04 6.24 7.85 41K 146K 6.34
Current. up at the open, but gave it back on very low volume as the stock continues to move up the 10 day MVA.
SCON 11/18 Test BO 5.91 +0.02 6.22 7.78 4M 3M 5.66
Current. Making a lateral move above the 10 day MVA on stronger above average volume.
SOHU 10/24 Dbl btm 31.4 +1.17 37.69 45 5M 9M 34.85
Current. Tapped 32.50 at the high, but gave some of it back on average volume. Stock bounced off support at 30.
TARO 10/08 Cup hdl 66 +0.15 61.51 73 123K 501K 64.88
Current. Narrow trading range showing a doji on the 10 day MVA on below average volume. Making a lateral move on the 10 day MVA.
TLAB 11/10 DB hdl 7.9 -0.33 8.27 9.88 3.7M 6M 7.86
Current. Gapped down at the open and kept moving down closing below the 10 day MVA on below average volume.
TMWD 11/19 BO 7.8 -0.35 8.15 8.78 648K 900K 7.41
Current. Pull back on much lower, but average volume. Managed to retain most of yesterday's great move. Still in uptrend.
TSCO 06/03 Rv H&S 40.29 -0.13 23.42 27.62 319K 603K 39.94
Current. Tapped the 10 day MVA at the day's high, but could ot hold the gain showing a tight doji at support of 40 on slightly higher, but still below average volume. Looking for a bounce from 40.
TSCO 04/24 Cup hdl 40.29 -0.13 21.88 26 319K 603K 39.94
Current.
TTEC 11/19 Test BO 10.14 +0.3 10.25 12.27 1.2M 660K 9.32
Current. Nice move up the 10 day MVA on stronger above average volume.
TVIA 11/04 Cup hdl 2.52 -0.31 2.62 3.34 132K 219K 2.38
Current. Thudded down to hold the 10 day MVA on average volume. Still in good shape.
ULGX 11/13 DB hdl 5.5 +0.01 5.94 7.45 49K 130K 5.32
Buy Not Hit. Moving up the 10 day MVA on stronger, but still below average volume.
VAR 10/28 Cup hdl 66.85 +0.24 64.5 74.25 460K 1.1M 65.42
Current. Tested the 10 day MVA and rallied showing a doji on below average volume. Making a lateral move above the 10 day MVA.
VLGC 11/10 Cup 1.89 +0.03 2.06 2.72 2.7M 1.3M 1.92
Buy Not Issued. Tapped 2.10 at the high, but gave it back as the stock moves up the 10 day MVA on strong volume surge.
XLA 11/17 Test BO 2.82 -0.24 3.14 4.12 817K 950K 2.87
Current. Tapped 3.18 at the day's high, but gave it all back to close just above the 10 day MVA on lower, but strong volume. Needs to hold here.
XLNX 11/12 DB hdl 35.3 -0.55 34.78 41 9.3M 11M 33.55
Current. Continue to move up the 10 day MVA on stronger above average volume. Tapped 36.48 at the day's high, but could not hold the gain.
XLNX 11/01 DB hdl 35.3 -0.55 32.68 38.68 9.3M 11M 33.55
Current.
ZMH 08/09 Test BO 63.67 +0.06 51.12 59.55 684K 3M 62.78
Current. Continue to make a lateral move between the 10 and 18 day MVA on very low volume.
Downside Plays
Stock Date Play Close +/- Pivot Tgt Vol TgtV Stop
ARDI 11/10 Put 12.25 -0.04 12.12 10.06 450K 1M 12.98
Buy Not Issued. Tapped 50 day MVA and rolled over closing below the 10 day MVA on below average volume. Needs to break support at12.
ASCA 11/01 Put 21.1 +0.08 20.27 18.85 143K 185K 21.25
Current. Another relief bounce closing on the 10 day MVA.
MERQ 11/18 Put 44.05 -0.41 45.21 42.05 4M 3.5M 46.05
Continue to move down on lower, but still very strong volume.
PFGC 11/15 Put 38.4 -0.45 38.58 36.05 340K 450K 39.12
Buy Not Issued. Tanked well below the 10 day MVA on stronger volume. Held before support at 38.
SFNT 11/11 Put 32.49 -0.05 34.05 30.55 171K 461K 35.12 Continue to make a lateral move below the 10 day MVA on very low volume
Good Investing!
Jon L. Johnson and your IH Alerts Team
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP. or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners in Online Investment Services, LP. or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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