I want to post this before GS earnings, so I am not bias in my opinion...
Here is why XLF will close above 29 by friday...
There is to much open interest puts at 29 (38k calls vs 129k puts).
At $30 we are about even (106k vs 137k).
At $31 we are (120k vs 94k)
At $32 we are (124k vs 96k)
At $28 and below, its off the charts with puts to calls....
So, XLF can go to $31 by friday, but thats it, no more...
I wish I kept track of the open interest.. I was sure there was a ton more puts than calls, but now it appears its only the 29's and below that are heavy on the puts.
That said, those put options will expire worthless. So, XLF will most likely stay above $29, or will be a huge speculative buy below 29 this week.
This is where call options can go from $.05 to $2.50 in just a few days!
in other words...$50 investment can turn into $2500.
tb
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