OPEX Jan 3, 3014 Open Interest Updates

Note: I actually have no affiliation with the creator, but thought it was ironic that I found this and then noticed we share the same name 🙂 

Let’s make 2014 a great and prosperous year!!! Happy New Year to all my followers.

General Market Update

There isn’t much to say. I stated over the weekend that I was scaling back and conserving cash, but that I was not prepared to short as I thought we still could have upside left. You can read the post here. Nothing has changed from that perspective. We are a bit extended here, but so far the risk is still to the upside. Just note if we keep going up that there may not be much more upside left before a pull-back.

Open Interest Updates

It is important to view tomorrow with a very open mind. It is the first day of a new month and new year so there will be a lot of new money coming in. New money can overcome any of these open interest graphs as well as technical charts. Pay attention to where money goes.


SPY: I have no idea how this will play out, but we are currently over the 183 high strike and so 186 does seem like a likely target. Perhaps we get there and then fall back or perhaps we close there Friday. If we gap down, then a pin of 180 would create the most pain (I see that scenario as unlikely, but still giving you the information).


AAPL: It definitely got some momentum on Friday and I imagine this year will be better for AAPL than last year. Perhaps new money will flood in over the next couple days, but I’m always weary with AAPL so I’m not anticipating anything. Currently, the most painful pin to buyers is 560 (close to where price currently sits). The good news for bulls is that the largest changes on Tuesday were added puts.


AMZN: Price is currently where the max pain to option buyers would be. I think this can go either way so I have no edge in terms of which direction will win out.


BIDU: Looks bullish, just as China is starting to. More puts added Tuesday, which helps the bullish case even more.


FB: Those calls are a going to be challenging unless we can gap over them. Let’s see if new money can take them out. If not, expect a close below 55.


GOOG: After a pretty decent dip, it ended up closing at all time highs on Tuesday. Price is right where the highest strike is so you have a great reference point technically and in terms of open interest. My thoughts are up seems more likely.


LNKD: The resistance will be 220 to 225, which makes sense technically as well.


NFLX: If you draw a channel from late October to now you will see that price is barely hanging on to the bottom of the channel, which is closely aligned to the 20 day MA. If open interest plays a role in Friday’s close then 360 to 370 is the range.


PCLN: Longer term, PCLN still exhibits a very healthy chart. It does look like it wants to visit its 50 day MA; however, be careful because this is a hot stock to own and new money may want in.


TSLA: Still struggling in the same place. Highest strikes of 155 and 160 haven’t changed.


TWTR: Currently 65 seems like a magnet for a perfect pin, but once again new money can change things fast so keep an open mind.