With the market on the defensive and fund selling evident, why is the market holding up so well? What I mean is how come we’re not down to 104? The charts look negative, so how can you blame the short term funds who must already be short, from probing further for additional weakness? In lieu of this, prices held up pretty well in my book. Now does that transmit into the market being a buy? Certainly not! But I won’t be surprised if we see a short covering bout tomorrow.
Featured option transactions: N100/110 (4 by 1) put spreads went 170-165 (500 by 2,500). Is this price disaster insurance? Rolling profits? Sep 120 calls went 400, and Sep upside calls were bid for, and even the downside Sep puts firmed up. July 110 puts went 550-560. N 105 U 110 put spreads traded 440. July 110p/120 put spreads (1 by 3) traded 250 and 255 (size).
July futures settled outcry at 106.75 down 50 points for the day, the high was 107.10, and the low 106.30
Futures (outcry) 5,189 (electronic) 8,671 at 12:30, with 9,615 at 1:00
Calls 8,655 and 7,888 Puts
Technical: down trend still intact, lower to sideways;
Support: Basis (July Futures) 106.20-106.00
Resistance: 108.25-108.35, 109.60, 1 10.20-110.44, 111.35-50, 112.60, 113.40,
In July the 9 day moving average is 110.68, 18 day 111.86 the 40 day 113.68
Crystal Ball: At present, I am still waiting until I get a better feel before taking any steps at adding any more to the long call spreads I hold. I see no reason to get out, nor do I see any urgency to add to them. Instead, what I see is sideways prices and a market that is going nowhere.
by Jurgens Bauer
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