[Weekend Summary]
Dear Member:
The markets went on a bit of a ride this week. It has just been a matter of time before we saw a retracement and it came this week. Now the question is where from here and while I certainly don't pretend to know the answer, it has the feeling that we may be in for a bit of a downdraft. However, volatilities settled back down today after the jump yesterday and the major indices rebounded a little albeit on somewhat lowered volume. In any event, the caution flag is now out as we see what the early part of next week brings leading into options expiration.
When the action gets a little hot and heavy as it did the past couple of days, I do like spread positions since I have some protection against disaster and can often adjust to generate a profit on one leg or the other. Each of the spreads is still fine. SPY, Citigroup (C) and Sirius Satellite Radio (SIRI) all dipped, but remain in good shape because I am in spreads.
The same is true for the Q's which dropped 62 cents overall, but remained above the strike for my short leg.
We may be nearing the time to place some bearish plays which I have found can be very profitable fairly quickly.
Have a great weekend.
Bill
|
