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[Weekend Summary]

Dear Member,

Toward the end of this "Weekend Summary" I want to discuss the bearishness of the market as evidenced by today's action which prompted me to exit three profitable tech plays before the weekend.

Yesterday and today I closed my bullish LEAPS positions on Broadcom (BRCM), Taiwan Semiconductor (TSM) and Intel (INTC). Looking at the overall market in the techs, it appears as though the semiconductors may be turning down again so I took profits while the taking was good.

I sold my Jan '06 calls (WGJAH) on BRCM yesterday for $3.10 a share and a $0.30 a share profit before commissions. That represented a 10.7% gain over three weeks. BRCM plummeted more than $4.00 today so the exit was not only profitable, but timely as well.

Today I sold my Jan '06 $5 calls ((WMGAI) on Taiwan Semiconductor for a $0.15 gain and 6% return in FOUR DAYS before commissions. As I indicated on my entry alert I was only looking for a small pop and I was lucky enough to get it.

I also sold my Jan '06 LEAPS calls (WNLAE) on Intel (INTC)for a $0.10 gain and a 6.7% return (before commissions) for three weeks. I just didn't want to stay in these techs over the weekend.

I did enter and stay in a bullish play by selling naked puts on Armor Holdings (AH), a defense oriented company which armors Humvees and people for the military among other things. AH announced decent earnings in line with expectations this week and promptly tumbled. I sold the Nov 40 puts for $1.90 a share. Yesterday, the stock chart delivered a candlestick "hammer" at a support level and today the stock moved up more than $1 to close at $39.20. This stock is one I would not mind having put to me since I have played it many times in the past writing covered calls. By the way, always remember that the risk graph for a naked put is precisely the same as the risk graph for a covered call.

I was stopped out of the put leg of my Feb 60 straddle on Harley Davidson (HDI) and got $4.20 for the puts.

Overall, the markets look pretty bearish with the Dow Industrials leading the downward pack. Today the Dow broke out of its trading range and down below the August lows on above average volume. It looks like it could easily drop another couple hundred points to about 9624. The SP-500 was only slighly better, but it broke some support around 1100. Next stop 1084? The NASDAQ also remains in its' downtrend since January. It broke through a minor support today and I am anxious to see how it handles 1900.

I will be extremely cautious about unhedged bullish plays and intend to look for bearish opportunities for the beginning of the week. Remember, October has the reputation for being a dangerous month in the stock market.

Hope you enjoy your weekend. Looks like we should be in for the start of a terrific world series. Good trading.

Bill


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