How Option expiry this week will play out......

Option expiry always brings many historical interpretations & FEAR for traders......

FEAR is dictated by MM ability to control strike price......

History tells us that OE is generally POSITIVE......

BUT.....history is always made each week/month/ year...so past MAY not be relevant.......

What is my guess????

I will lean towards positive close for the week.....WHY do I think so????

Because....we had every opportunity to go down substantially...but we recovered nicely on Friday......

Message of the market is .....UP

AGAIN...we have MANY hedge funds positioned for weak OE.....

When we start rallying against the odds...then there will be a PANIC to cover short position AGAIN.....

Thus a STRONG/UP week in my "crystal ball"

As we are ELEVATED..it is PRUDENT to know IF your stocks are positioned to move UP...for that check recent TAPE.....

Some stocks are staying strong throughout this rally......BUT MAY be getting extended..so a basing period MAY be in order.....

Many stocks have stayed near their JUNE prices...so they have based for 75 days and MAY be ready to EXPLODE UP.......so Check charts on your holdings.....there IS such a thing as UNDERVALUED/OVERVALUED on a short time frame......

As market TAPE is very strong..it will be WISE to have a long term view of stocks......so position accordingly.....

YES...market CAN/MAY go down 3% in a hurry..BUT the days of 7% to 9% correction MAY not be in cards this week......

I have a strong feeling that this TAPE will take us into new highs easily & MAY surpass some of the so-called resistance numbers being thrown around..like 1040 in S&P 500......my GUESS is that we MAY come near 1100 before any correction sets in.....then MAYBE pullback of 5%......

SO...how to place your bet on a short term & long term basis????

I will look @ forward PE on *my holdings & other strong stocks as taken from http://www.moneycentralmsn.com/

*SOL..12.81
*POT.10.93
*RIMM15.03
*RVBD78.04
AAPL.24.78
IPI....14.38
TSL...10.97
JNPR. 28.30
GOOG21.26
BIDU38.33
FUQI12.92
GS..10.25
BAC.17.74
BX...15.61
C....26.93
GE...15.82
TLM23.41
CHK10.20

Fundamental analysis is extremely important & keep re-visiting your stocks in terms of FA.....once you are comfortable with FA on an ongoing basis then.... turn to TA like RSI,BB,MACD,STOCHASTICS,50DMA etc......

This market HAS been easy for those who believed in fundamental improvement in world economy.....NOT everything is US centric...there are bigger economies @ play like China,India,Brazil,Russia who MAY be calling the shots NOW........

Good luck in your OWN strategy.....no matter how you play it...make sure your comfort level is high all the time.

BLOG does NOT give buy or sell.

Saleem