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stock watch, stock trading
[Weekend Summary]
Dear Member:
A strong week for the indices. The Dow Industrials may be flirting with all time highs. While much further from that summit, the SP-500, and to a somewhat lesser degree, the Nasdaq are pushing in that direction as well. As it seems that the markets are returning to an overall bullish direction, I have increased the pace of my trading somewhat. Historically, September and October have provided some real drops, but they can also be a time to find good bullish entries.
This week, I bought some Jan 70 puts on Transocean (RIG). The stock has essentially gone sideways since my entry, but that is one of the reasons I bought 4 months time. It is still in the downtrend that began in May so I am not unhappy with the postion.
I also entered a bearish call spread on Sepracor (SEPR) by simultaneously selling the Oct 52.50 calls and buying the Oct 50 calls for a net credit before commission of $0.65. The stock closed Friday at $48.08, down $0.48. As long as no adjustment becomes necessary and the stock stays below $52.50 by October expiration, this will represent a before commission return on risk of 35% for a month.
The Tech ETF (XLK) had a strong week on strong volume. I continue to like my Jan '08 15 LEAPS call position which also affords the opportunity to sell higher strike calls against it creating a spread, reducing risk, and bringing in some income. Hopefully, I can make those sales at appropriate times. I have done just that with my '08 $2.50 calls on Sirius Satellite (SIRI) where I previously sold the '08 $5 calls.
I did a similar thing with SPY where I own the Dec '07 120 calls and sold the Oct 133 calls. I don't want to be called out of the Dec '07's so I need to watch closely as SPY tinkers with resistance below 133. As long as that resistance holds, I have nothing to do with the short leg.
The Biotech Hldrs (BBH) were fairly flat for the week and I am looking for a spot to roll out my Jan calls to a farther expiration.
The Micron (MU) spread continues to do quite well and at least for now I have nothing to do there.
Have a great weekend. Thank you for subscribing.
Bill
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