On Tuesday the NDX “GAP Opened” higher and peaked at 1487.83 , before pulling back a bit into the close. The equivalent level reached for the QQQ was 36.99 when the NDX reached 1487.83. Today the markets chopped around in a very tight trading range, with the QQQ closing at 36.73. It is NOW very clear to me that the “boys” are NOT holding the HUGE Option Open Interest in BOTH the PUTS (south of 36) and the CALLS (north of 37). If fact, the “boys” SOLD all these contracts and will have a BIG PAY DAY by making sure the QQQ (and the NDX which the QQQ is based upon) “closes” between $37.00 and $36.00 on this Friday; thereby making the HUGE Open Interest (which the “boys” pocketed the premiums) expire WORTHLESS.
Here is the QQQ Open Interest as of today’s close in the June QQQ:
PUTS
Strike 36………279,548 contracts
Strike 35………488,395 contracts
Strike 34………357,203 contracts
Strike 33………343,136 contracts
Strike 32………155,026 contracts
CALLS
Strike 37……….233,246 contracts
Strike 38……….189,058 contracts
By closing the QQQ between the price of 36 and 37 on this Friday, Expiration Day, the “boys” retain a HUGE PROFIT. So expect more of the SAME choppy action, like we had today, into Friday’s close. After which the market’s TRUE and PRIMARY Trend will emerge. The “boys” are in COMPLETE CONTROL!!!
I am keeping my STOP LOSS at 1520 in the NDX for the next few days.
Currently, I have a position in the Rydex Venture (RYVNX) Fund, established on 04/12/04 at $24.92, within the Aggressive Portion of the portfolio; while the Conservative Portion of the portfolio has been in Cash or Cash equivalents since 01/02/04.
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