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Tuesday, November 6, 2007

Sector Rotation

Out of: Finance, China, Real-estate.

Into: Agriculture, Metal Mining, Gold, Technology, Semiconductor, Biotechnology.

QQQQ's move toward to 53 area has scared away a bunch (about 40% of what was there as of yesterday) of call contracts congregated on 53. This opens up the path for it to move higher. On the way down, a huge amount of put contracts has congested the 50-52 area, preventing Nasdaq 100 from going down to that area any time soon.

China's decision to close up the pipe to Hong Kong was our loss, but China's gain. Otherwise, all the money in Chinese savers accounts will flow to Hong Kong then on to Wall Street bankers wallets.

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