Which way Wall Street Market Makers will play Options Expiry on...

Which way Wall Street Market Makers will play Options Expiry on a Big Friday?

Yes MLS gained 1c (yes CENT not PIPS) to finish on 5.4c. Our volume today was very very high, over 19m shares traded. Personally as I mentioned yesterday wanted to see it get above 4.4 so picked up a few at average 4.5 on the return after touching 4.2. After making 10% losses in last phase of my trading stocks, I am now actually in front and was tempted to get even as it has been long time but restrained myself. Also hold quite a sizable oppies, both OCs and ODs.

So is this a real deal? The jury is still out until we see an announcement. But the price action and volume speaks for itself. As with all spec stocks, there are always some in the know and they might be getting. A very unlikely scenario is that some traders are just pushing it up - but at this stage its not looking like that. Also we have to remember that based on prospects we were languishing, trading near our cash position, so its not surprising that some have come to realise that risk-reward is very good from here. Lets see, I don't want to get into euphoria yet, want to see some evidence as well, hopefully soon.

ASX Li stocks were flat for second consecutive day. Of 54 stocks that I track, it was flat and on average no gain or loss. And in terms of numbers - it was nearly same - number of stocks that went up and those which went down

Overnight US Li stocks had another disastrous day. On average they lost over 4%. This is the fourth consecutive day that they have lost over 3% every day. Previously also we have had down days, but never consecutively a slightly higher number for so many days. It look like some big selling is happening - one would think institutional. Lets see, Li macro is still very strong and it will turn one day.


What next -

The US indices had a red day again, though fall was much smaller from previous day. SP 500 lost close to 0.3%. ASX was mostly up the whole day, though not much. Finally closed around 0.25% up, similar to yesterday. Again as has been happening in last few days, resource stocks were still weak.
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Yesterday SP 500 bounced of 3900 support, touching 3906 - the first number I have been talking that we need to hold, possibly rebound. It has done that for one day - so that was positive. It still seems to be in indecisive state, consolidating, finishing at 3946 - so nearly the middle of two areas - 3900 and 4000 - both critical levels to provide short-term direction.

Some of the lead indicators are mixed - Yields, Dollar Index and Volatility Index - so no clear direction from them. The Feds are still hawkish as they don't like stock market going up.
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Tonight is Options Expiry. As I wrote yesterday, it is a very manipulated day. For tonight I think 2.1 trillion dollars of Options are Expiring. Its big money. Market Makers who run Wall Street may try to manipulate it to maximize their gains and inflict Maximum Pain on Option Holders. Although anything can happen and a lot of this is speculative, but at this stage this maximum pain I think is sitting between 3850 and 3900. But people might still be playing and this could all change. If lot of Puts (Shorts) are added, they might push it up. So anything can happen.
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Personally, as I mentioned yesterday I have been going bit defensive and taking off some from table while the play between 3900 and 4000 on SP 500 is happening. Once it crosses either way, it may provide a better direction.
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So what will happen tonight? Its more unpredictable today due to Options Expiry. Most of the Friday's have been big nights on US markets - big gains or big losses (over 1 and sometimes 2%). There is a chance of that happening again tonight. We can only hope that this time its a big green. Will that happen? Lets hope so. Enjoy your weekend and all the best.