Bear Stearns Selling May Have Signaled Capitulation
The Carlyle default has ramped up the worries in the market about that nobody is too big to fail. Those that are being hit hard, include Bear Stearns, which is down over 16 percent on turnover of 24 million shares. Other brokers and i-Bankers are likewise feeling the pain, but that pain is most evident in BSC where over 140,000 puts have changed hands in the first 90 minutes of trading!
The average put turnover of the past 5-days has been 27,000 puts, so in the first 1 ½ hours to see us trade over 5 times that pumped up volume, well it SCREAMS how desperate things are in BSC. To see such large turnover in Bear stock (3 times normal full session volume thus far) and options suggests we may be seeing the capitulatory selling that marks bottoms. That’s not the glass half empty argument folks. There is both blood in the streets and panic in BSC.
By: Jon "DRJ" Najarian