As long as he have mutual fund un-investment and lack of confidence in US market from foreign investors, we are going down. Most prevalent pattern over last year is slowly ramp up until 1-2 weeks before expiry. Some months like DEC and JAN they really let stocks fall week of expiry and the week after indicating net selling to balance specialists books.
This tepid simmering of markets, from 1/6/03 to 1/15/03 and I believe now at current prices, does not let call buyers bank real profits until they deliver the kill shot via a 4-6% stock correction pre-market. I am not saying CSCO tomorrow will be FEB's catalyst but market breadth is bad, McClellan Sum -326, and a handful of large cap issues can't lead this market much higher.
Nothing Powell can present tomorrow will make fence sitters in UN come join Bush in the Iraqi roundup.
I am going to close another 20% of long plays, mostly short PUTS, that are profitable or could hurt me tomorrow while holding on to majority of short call side of hedge. Strategy has worked OK for Oct, well for NOV & DEC and very well for JAN. As market sells off I take additional purchasing power and sell the replacement MAR short Calls and hopefully decline is long lived and constantly slowly downwards as 01/10-01/19, I will able to sell MAR call positions without having to close out FEB short calls allowing them to go to zero. I don't see a catalyst to send this market higher than shorts wouldn't jump all over. Budget deficits, abysmal balance of trade, and potentially higher interest rates, making bonds more attractive, should seal Zeev's forecast of continued decline.
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