Speaking of ephemeral matters, the Fed obviously knew before their statement what the retail figures would say, and thus maintained their neutral stance in the face of a wall of negativity. The Fed announcement was a non event, so when the retail numbers came out, again pre-market, the boys gapped them up 6 points. Why some random manipulated inaccurate guesstimated revisionist government numbers should affect the true state of the economy and the market predictions by half a percent does not make sense.” The equity market agreed.

Secondly, commenting on how strikes operate as round attractors, would not structural pressures of the various strike holders competing try to drive the price to the middle strike — say the current 1425 in the case of the ES option — and create a range on either side. The 1430’s would be bearish, the 1420’s, 1425’s would be spit bullish and bearish, and divided, and drive the price to the middle where we’ve been swinging around for a week now. Study of options as cycles change to augment the arsenal and battery seems worthwhile, and it is a deep subject, so we may need to draw on the expertise here.

George Zachar comments:

Index futures/options are a special case because their sub-components themselves have options. The round/attractor/pin dynamic is most likely to show itself in “solids” like individual stocks around non-quarterly expiries, and commodities, (un-tested). There are epic stories in bonds and currencies about “wars” at strikes at expiry.

Tim Humbert offers:

One of these epic stories is recalled here, in the Bill Lipschutz Market Wizards interview, reproduced on his website. It starts with the line, “Were there any other trades that were particularly unusual for one reason or another?”


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