Bulls On Defense

The bulls have successfully defended 1134 on the S&P 500 for two days now. Given recent history it would not be surprising to see the bulls mount a rally from that level. However, they have expended so much energy buying calls at this level  that I would be surprised to see a rally with any oomph. A solid break of 1234 would likely cause some weak hands to fold and might set up a better bounce.


Onlooker said...

Obviously you meant 1234, not 1134. Nice call though, very nice.

The latest ISEE EO number is 577! I've never seen even an intraday number that high. That can't work out well for all those buyers.

PJ said...

Hi Onlooker,

I was going to comment on the same thing ... and 524 in the next 20-minute period ... at CBOE from 10:30 to 11 am there were 175,000 calls and 45,000 puts for a 389 equity-only ratio, and that was before the ISEE call buying started at 11:30.

Looks like the bulls are buying the dip ... They believe POMO will save them!