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OptionPundit specializes in consistent income producing option trading strategies on underlyings ranging from stocks, indices, commodity, currency to niche products. OptionPundit authors a premier option trading blog @OptionPundit ( OP's research and trading... More
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  • Key Market Internals

    Markets are pulling back rather sharply today. As of this writing Dow Jones Industrial Average (NYSEARCA:DIA) is down 160 points (1.25%), S&P 500 (NYSEARCA:SPY) is down a little over 1.5% and Russell 2000 (NYSEARCA:IWM) is down 1.7%. Nasdaq (NASDAQ:QQQ) is the hardest hit which is down over 2% as of this writing.

    There are almost 4 declining issues for every advancing issue, all the 30 Dow components are in red. However, based on trading so far, it is still not a 90% down day.

    (click to enlarge)

    (Charts from TDAmeritrade)

    While VIX is up at +8%, Near term volatility index is sharply up at +11%. VIX May futures are up at +6% and June VIX futures are up +3.5%. Wasn't TVIX supposed to reward 2x ? It is up +8% as well. Yesterday's closing indicative value was $5.97.

    Both AAPL and GOOG are down ~$12, based on option trading volumes so far $570 and $600 strikes seems likely for pinning respective but dynamics might change in the next few hrs of trading.

    For Bullish hope to remain alive, S&P500 shouldn't close below 50dma or reclaim it early next week, similar to what AAPL needs to do, else it's going to be tough time ahead. Also for QE3 to materialize, markets needs to pullback.

    Today's close will be one of the most interesting closes in recent weeks.

    Profitable Trading, OP

    May 04 12:58 PM | Link | Comment!
  • The Apple Rally Is Not Due To ShortSqueeze Only

    Apple (NASDAQ:AAPL) announced solid results. The stock is up +$43 during after-hours trading. Overall, the biggest company on the planet has once again smashed all the estimates and erased any concerns whatsoever due to weakness in Verizon and AT&T activations.

    (click to enlarge)

    One thing that bears may like to tell you is that this after-market rally is driven by a short squeeze and will be short lived.

    Whether this rally holds or not, I can tell you that short interest is not massive when compared with average daily volume. Pls see attached chart for a quick update on AAPL short interests.

    As of April 24th close, there are 8,093,500 shares short and it will take only 0.3 days to cover that.

    So friends, don't discount after-market rally by saying this is only due to shortsqueeze. Bears, give due credit to a wonderful company that has produced another stellar performance.

    (The table is from

    Profitable Trading, OP

    Apr 25 3:11 AM | Link | 2 Comments
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