Bearish Bias into the May 2010 Option Expiration

PUT/CALL BIAS
ISE & CBOT Call/Put Ratios:

OPEX Calendar May-Jun,2010

The timing of the current sell down one week before the OPEX, the still rampant complaceny and the current structure of the Put/Call Bias hint at a volatile week next week with a tendency to push a good amount of earlier sold calls out of the money and to pull some recently (see down spike in the Bias chart) purchased puts in the money.

This all has to be seen against the backdrop of the biblical level of complaceny as evidenced by the extreme up spikes in the ISE & CBOE charts (before the corrections started) and the extreme level of the 89day MA in the BIAS chart (far beyond the 2007 levels).

Too many market participants are still on the same side of the trade and the shorts have just loaded the books with PUTS .....