May 12, 2014

Open interest hints at correction

Current open interest points to support at 6400 and resistance at 7000.

Note that resistance at 7000 has been defined from start of this series. Bias has been bullish.

However put writing levels have not shifted in direction of the rally which writers while bullish are expecting a correction. Logically I would expect option writing support at 6800 levels or so. This is not the case.

Now markets are already at this level so it will be interesting to see what happens.


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