Options X Week is Opposite Week

David Frost // Market Outlook


September 15  

What goes up  must come down and what goes down must come up.

That is the prevailing wisdom during options expiration week.

Case in point.  Slightly early, but right on Que nonetheless.  Last Friday we heard that Google was looking to purchase Ebay.  While that may be true, and would likely make sense of Google wants to dominate the online payment space.  Ebay owns Paypal.

This happens all too often during options X week that I’ve become immune to the rumors and speculation.  Ebay was up on Friday, only to return to pre rumor levels today.

We should see more of this as the week goes on.  Today, Tesla got taken out behind the woodshed.  TSLA was down $24.  The media reason was that Morgan Stanley came out with a “note” saying TSLA had run up too far too fast.

Thanks Morgan Stanley, anyone over the age of 6 could have figured this one out.  Meanwhile, about 20 other research firms cover the stock and only one has a sell.  So why go down on just one report?  Short answer, it didn’t.  It was down because the thieves in on the trading desks of the big investment banks decided to take it that way.  Have no fear, they’re not done yet, watch TSLA go to $240 and then recover at least $20 – all this week.

They’re wiping out the option holders, but this is a discussion for another time.

We still have the Alibaba IPO which seems to be doing OK.  It seems like there is adequate demand and that’s not surprising since it’s a real business after all.

The moral of the story this week is to not be swayed by the shenanigans of stocks moving up and down, many points at a time.

Watch tonight’s video for more analysis on the markets including Gold, Oil, et al…

About the Author

Trading and investing in markets is second nature to some, but a mystery to others. The goal is to provide a forum where everyday people aspiring to be part time or full time traders will learn how view markets differently and profit beyond their wildest dreams.

David Frost