Jim Dalton was the first Marketing Director of the CBOE, and he was hired by Joe Sullivan to put together the marketing team for the exchange. As Joe Sullivan wrote in his recounting of the era (be sure to read that recount as well), “Jim Dalton...built the best marketing team assembled at any exchange in that era if not ever.”
Stocks are still reeling from the failed upside breakout over 4100 in February. You don't hear much about it in the financial media, but it is a large psychological weight on the market. Moreover, the resistance area that was left behind when the market retreated after its failure is strong, in the 4080 4200 area.
This article was originally published in The Option Strategist Newsletter Volume 8, No. 20 on October 28, 1999.
There are various trading strategies – some short-term, some long-term (even buy and hold). If one decides to use an option to implement a trading strategy, the time horizon of the strategy itself often dictates the general category of option which should be bought – in-the-money vs. out-of-the-money, near-term vs. LEAPS, etc. This statement is true whether one is referring to stock, index, or futures options.
Prices edged lower this week, as the bulls are still reeling from the failed upside breakout that took place in February. After the breakout (whether you consider it to be over resistance at 4100 or whether you consider it to be the blue triangle in Figure 1), prices have pulled back below the apex of that triangle and volatility seems to be slowing down at least on a closing basis.
I would highly encourage anyone who is going to read this article of Joe Doherty’s recollections, to first read the article by Joe Sullivan. Joe Doherty was extremely instrumental in the creation of the CBOE, for he worked right along with Joe Sullivan as the process inched forward for four years before the exchange was born. These are some recollections that Joe D has of those years and the ones that immediately followed.
The specter of a false upside breakout has come true, and that could prove to be a major problem for the market. In late January $SPX broke out over 4100, and it looked like the bull market was ready to return. However, the breakout only reached 4200 before prices turned south again. Now, $SPX has fallen below short-term support at 4060-4070, which in my opinion, completes the false upside breakout scenario.
The CBOE’s first President, Joe Sullivan, was “everything” to the creation of the CBOE. In this article, written by Joe himself, the inner workings of politics – both in Washington and in Chicago – exchanges, and traders, all combined to make for a very interesting four years of legwork needed to start the CBOE. Joe did a tremendous amount of soothing, cajoling, and arm-twisting (I’m sure) to get the CBOE off the ground. He served as the inaugural president of the CBOE from its founding in 1973 until 1979.