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trend trading stock, stock trading
[Weekend Summary]
Dear Member,
After looking like they might be breaking out, the major indices have again retraced into their trading range. The SP-500, for example, is compressing between a resistance now around 1142 and the shorter term uptrend that began in mid-August. Meanwhile, the volatility indices (VXO, VIX and VXN) have turned up. Increasing volatility often signals a decreasing market.
The increasing volatility should help my Feb 60 straddle on Harley Davidson (HDI). As volatility increases so too do option prices in general.
Broadcom (BRCM) remains in its' uptrend and I will stay with my Jan '06 40 LEAPS calls unless it closes below the trend line. Intel (INTC), on the other hand is on probation. It closed today a bit below the recent support at 20.85 so I'll be watching closely to see whether it hits my stop at $19.54. I own the '06 $25 calls and will exit the position contingent on the stock hitting that number.
Imclone (IMCL) in which I have a bullish put spread (long the Nov 45 puts and short the Nov 50 puts for a credit at entry of $1.60 a share)remains comfortably above the magic $50 number where there is a double bottom support.
My bullish put spread on Avon (AVP) may very well require adjustment on Monday since the stock closed below support today.
Rocketing oil prices and a non-farm payroll that was mildly disappointing seemed to keep the market from maintaining the modest uptrend it had begun.
I try to find high probability trades and found that particularly difficult this past week. In such times, I often opt to place fewer trades and keep my capital free while awaiting better opportunities.
Have a great weekend! I expect to be playing some golf and fishing in Cabo for a long weekend.
Bill
Bill
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