[Weekend Summary]
Dear Member:
Though still above their 50 day moving averages, each of the major indices were down the last two days. Volume was fairly strong on the downward move. Again, I think it is a time for caution for bulls. I want to see how far the current little retracements go and I am quite wary at the moment. I believe it is wise to do a little hedging against bullish positions, for example, by considering some puts on the QQQQ, DIA, and/or SPY to attempt to guard against a serious down move. Historically, we are in a dangerous time of year and prudence is high on my list.
I bought some puts on KMX this week after confirmation of a shooting star candlestick. So far, I like the play.
The bearish call spread has been gaining profit daily and is looking quite good so far. I also own puts on RIG and it is behaving as it should by continuing to remain below the downtrend line.
I have a diagonalized calendar spread on SPY as you know, and the recent retreat on the SP-500 along with the passage of time has helped the short 133 Oct call leg gain ground. I'll look to close that leg on an upturn.
The tech ETF (XLK) has now turned over and it looks like a good time to sell some calls against the long Jan '08 15 call position. Sirius Satellite (SIRI) on the other hand has dropped to support once more and may well afford the opportunity to buy back the short $5 call leg at a profit on that leg.
Micron (MU) is right at the intersection of a horizontal price support and an uptrend line. The spread is doing fine so far.
The Biotech Hldrs (BBH) were flat for the week.
Thanks for subscribing. I hope you are learning something about some option strategies.
Bill
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