Friday, January 13, 2012

OPEX Breakout Coming?

Next Friday is Options Expiry. Looking at the Weekly charts of YM, ES, NQ & TF below, we can see that they closed the week at or just below resistance on higher volume, with Bollinger Bands widening, which suggests an upward continuation. In support of this suggestion, the Dow 30, Dow Transports, Dow Utilities, S&P 500, Nasdaq 100, and Russell 2000 all closed above their support levels that I mentioned in my post on January 10th.


If they break and hold above, they may make a run towards the upper Bollinger Bands on the charts below...each candle represents a one-month Options Expiry period...the current candle will close on January 20th. We'll see if they do break and hold above resistance, and how far they rally...alternatively, price may drop to the mid-Bollinger Band on either timeframe. Inasmuch as it's a short week, we may see daily opening gaps occurring from aggressive overnight trading with market makers running prices further up during market hours in order to reach such lofty targets.


Enjoy your long weekend!