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Wednesday, September 16, 2015

Daily update 9/16 Odd option configuration

More up.  I guess a sizable number of people were willing to bet the market will continue higher no matter what the FED does.  There certainly is a very broad spectrum of people's opinions.  I can't think of a single meeting ever like this in my time.  The FED has purposely been extraordinarily vague.  I wonder why.

SPX stuck its head up above the upper triangle line.  While this is a break out, triangle patterns are not all that reliable.  There are way to many false breaks.  Breadth was +73% which is quite strong.   However, the formerly hot biotech sector ended in the red.  The formerly trashed energy and basic materials sectors were the strongest.  This looked like a defensive move of selling high flyers and buying beat down stocks.

The futures reached the upper Keltner channel again.  That sparked a pullback the last time they did that.  They are approaching the 100 SMA so they have pretty much worked off the oversold condition. 

I have no idea what will happen tomorrow.   It seems odd after years of knowing exactly what the FED was going to do at every meeting to be in the position of having no clue.  We have seen a few wild moves when they did what was expected.  What is going to happen when nobody knows what to expect?  I suspect it will be interesting.

Shaeffer's research periodically puts out charts with SPY open interest at various strikes.  I don't see them every month, but over the years I have seen a lot of them.  Check out the one for Sept. expiration.


The largest open interest for both puts and calls is at the 200 strike.  I can't remember ever seeing that before.  Normally there is several dollars between the strikes.  My guess is that regardless of what happens tomorrow we will be back around 200 by Friday close.


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