4th Jun - Pre-market update

Options data:

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5200CE: 67L OI up 10%

5100CE: 54L OI down 5% ==> Resistance

5100PE: 38L OI up 84% -- A whopping 17L puts written yesterday. Sometimes these are market makers writing to themselves to confuse others - kind of like Cell Phone signal jammers!

5000CE: 33L OI down 6% -- only 2.3L calls unwound?? Very suspicious!

5000PE: 67L OI up 37% -- Again 18L puts are written. As I said for 5100PE - this could an optical illusion created by market makers.

4900CE: 64L OI up 1.33%

4900PE: 23L OI down 10% -- If this move is for real, I would have expected this OI to reduce lot more than 10% because call writers will be under pressure if market hits 5200+. Need to watch today's data

FII data:

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Index Futures: 1782Cr BUY

Index Options: 69Cr SELL

Stock Options: 474Cr BUY

Looks decent numbers from FII buying - but will there be follow through? I am always suspicious of GAP up openings in a heavily shorted market.

World Markets:

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S&P500 closed 0.4% up at the doorsteps of 200DMA. Europe closed strong with 1.2 to 1.6% - but off 1% from day's highs. Again lack of "follow through buying"? The first leg up is short covering but if there is no follow through buying then there is no rally.

One Interesting Analysis:

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So when the whole Main Stream media (CNBC folks) are celebrating the massive rise of Nifty in last 2 days - I went and checked what has happened to Nifty/Banknifty Open Interest in last few days. Oh man - its shocking for me - see this GIF to believe it

So the Open Interest in Nifty increases 8% on a day it falls from 5080 to 4960 and it reduces less than 1% when it gaps up to 5090. How much more fake can it get?

Same thing with BankNifty - OI up 14% on fall day but with 2 massive rise days OI has almost no change.

One last note - On the turnover on first 5 days of this series - 65k Crores, 65k Crores, 82k Crores, 73k Crores, 76k Crores. This is much less than the average monthly turnover of 1 Lakh-Crores in May. A low volume rise in a shorted, down trending market is could be only called short covering rally if there is no follow through buying.