This after a 10 point collapse Sunday night. Whether it was to suck in as many shorts to provide the fuel for a massive short covering rally remains uncertain.
But the open interest in OEX monthly options expiring this Friday is certain. And it strongly suggested such behavior early last week. It has only intensified.
Open interest is showing that there is a large incentive for insiders -- the ones who see all the order flow, stops, and resting orders -- to game the expiration. For every option that is bought, one is written (shorted). This is largely an insider's game for those with superior information. The incentive is to see the largest number of these options expire worthless. This week the game seems to be being played around OEX 800 which equates to 1790-1795 on the S&P cash.
I realize I stated this level incorrectly last week as 1805. Wrong. Oops.
1790-1795 is not a sure thing either. Once the market is able to be wrong sided, there is ample opportunity to "reload" at more favorable levels. Therefore other targets can come into play. The point is that large moves down and up are expected during setups like these and they are usually not trends but games.
War games. For your money.
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