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[Weekend Summary]
Dear Member:
The first three trading days of 2007 were pretty wild. On Friday, only 6 of 239 groups were up. OEX and NASDAQ volatilities both broke above resistance with the CBOE volatility at resistance. The S&P 500 and Dow were down this week with the Dow forming a double top resistance. The NASDAQ managed an 18 point gain. It really looks to me as though the market is ready to take a breather. I have to qualify that statement, however, because we are coming into earnings season and a number of positive surprises could very well result in a postponement of any downward movement.
I re-opened my bearish call spread on NVIDIA (NVSA) by selling the January $37.50 calls. That move had the effect of reducing my potential loss but not yet making the trade profitable again. It looks as though I may be able to roll down the short leg and turn any loss into a profit on this one.
BBH had a strong move up this week on higher than average volume which, of course, is bullish.
Anadarko Petroleum (APC) dropped along with the rest of the oil sector so I created a spread by selling the January '08 $47.50 calls for $3.10. I am now long the January '08 $40 calls and short the $47.50 calls. This move had the effect of reducing my overall risk in the position and bringing in $3.10 a share income.
Sirius Satellite Radio bounced up this week so I closed the short leg of my spread for a profit. I am still long the January '08 $2.50 calls and the stock was up 6.9% for the trading week.
The Citigroup (C) and SPY spreads are both fine. The stocks turned down this week which may give me a chance to close the short legs of those spreads for profits.
Have a great weekend.
Bill
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