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Thursday, May 13, 2021

Options Players Placing Bets Stocks Keep Rising


Traders established fresh Bullish positions last week by buying 35.6-M new Call options on stocks, up from a high of 28.7-M in February, when speculative activity was rampant.

Options traders make big bets on rising prices. This kind of activity could lead to negative returns in the S&P 500 and other indexes over a multi-week to multi-month frame.

Monday’s action in stocks drove the S&P 500 back into the Green for the year as easing lockdowns boosted optimism for an economic rebound. The benchmark closed at a 15-wk high, bringing its rally from the 23 March low to 45%; the NAS 100 rose to a record high and higher on Tuesday.

Small trader Call buying made up more than 50% of total volume last week, the highest since Y 2000,

Tuesday, the major US stock market indexes finished at: DJIA -300.14  to 27272.30, NAS Comp +29.01 at 9953.78, S&P 500 -25.21 to 3207.05

Volume: Trade on the NYSE came in at 1.2-B/shares exchanged

  • NAS Comp +10.9% YTD
  • S&P 500 -0.7% YTD
  • DJIA -4.4% YTD
  • Russell 2000 -9.7% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Very Bullish in here.

Looking Ahead: Investors will receive the FOMC Rate Decision, the Consumer Price Index for May, and the weekly MBA Mortgage Applications Index Wednesday

Have a healthy day, Keep the Faith!

Paul Ebeling
Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.   

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