The collision of global markets and social mood

Wednesday, April 17, 2013

The Insiders' Game

A year ago the IMF were calling for tax increases and spending cuts that were labeled as draconian. Now the IMF are renewing their call to ease austerity.

They have no idea what to do, but they keep saying anything that will make them sound authoritative.

The world would be better off without the IMF, as well as the UN, the OECD, the World Bank, and all the other supranational organizations which are unelected, ungoverned, and unaccountable to private citizenry. They are simply tools of the shadow elite.

Perhaps Europe is starting to figure out that no one knows anything. It's another down day in with sharp declines. ES futures are down hard too, but may be trying to find a bottom.

Price is in the middle of the multi-day range from 4/5 to 4/11. It could go either way at this point. I would like the odds better at a marginal new low or slightly higher than yesterday's close (closer to 1580).

There is something interesting setting up in the OEX options market which I watch closely. There are a very large number of calls that have been opened from the 705 strike in a solid block up to the 730 strike, a huge bet on much higher prices.

Higher prices may indeed come, but it looks like fodder for price pegging to me. Option writing, especially in the OEX, is an insiders' game. These people do not like to lose, and rarely do. It is in their best interest, by my read, to see the OEX settle at 705 (or just below) and make all these calls go out worthless.

705 would be roughly 1565 on the S&P. I have no idea how this would fit into the price pattern for the rest of the week, but will remain aware that there could be a tendency toward that area.

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