SYA Daily Report, page-5

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

Yes SYA lost half cent to finish on 22c. Our volume today was on nearly same as yesterday, around 114m shares traded. Trading now in this zone of 20.5 to 24, similar to what it was doing over a week back. Both markets and Li sector weakness is not helping the cause. For those wanting a fill, a good opportunity to top up. I will add to my position as have lets go a number of other stocks in last 3 days, but will wait to see a reversal first.

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.