[Weekend Summary]
Dear Member:
While one can never be sure, I think the markets have shown a serious propensity to remain bearish for a while. All the major indices were down for the week and each broke through a relatively important level of support. The SP-500 broke support and it looks like the next level down could well be below 1400. The Q's were part of the downsiders club and also have formed a head and shoulders. Meanwhile, volatility has jumped. All in all, while bullish plays may be found, I believe it is time to be very, very selective when entering bullish positions with a finger ready on the trigger for reversals down. In my view, emphasis is on holding cash and/or bearish option positions.
This week, I closed my bullish Smith & Wesson (SWHC) spread this week for a nice gain over a month and a half trade.
I added a bullish spread on Apple (AAPL) with expiration now less than two weeks away and am looking for this strong company to hold above $125 so I won't need to adjust.
In keeping with my present bearish inclinations, I bought an additional put position on QQQQ.
Once again, I say thank goodness for spreads. It looks like I may be able to take profits on the short legs of each of the spreads on Citigroup (C), SPY, and Sirius Satellite Radio (SIRI). If I do, I will probably roll the short position down a strike or two, depending on stock price, and further reduce risk in the long legs while bringing in some income.
Have a great weekend.
Bill
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