"It seems to be a general consensus by most that we are in for reversal of sorts in the QQQ's to get back to the MP area of 25 by OE, right?"
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michael...
I can only speak for myself, but I do not share that view.
While we are very oversold and a short lived, weak rally could develop here that might even take the Q's to 25, I think the oversold conditions would be more the cause than Max Pain. I personally believe that the chance that we head lower with delta hedging fueling the downside is at least an equal possibility.
For myself, I feel too much faith has been placed in the Max Pain theory and think Max Pain is but one of many factors in the market. Under certain conditions (trendless markets, for one), Max Pain can move the markets but the more trending the market the less influence Max Pain has, and if the market is trending strongly away from the Max Pain points, delta hedging can exacerbate the move. Also keep in mind that Max Pain is a valid concept only for those stocks that have a significant open interest going into options expiration.
Just my opinion, though.
mlsoft
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