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[Weekend Summary]
Dear Member:
The markets seem skittish if not schizophrenic at this point. The Nasdaq managed to inch up for the week and is still in the uptrend that began off the August low. The Dow and S & P 500 both lost a little ground and have daily charts that look similar over the last 2 and 1/2 months. They may each be forming a little double bottom support now, but I see an important level on the Dow at 13,500 and at 1492 on the S & P. Direction is far from clear right now so care needs to be taken and downsides protected.
The spreads on Sirius Satellite Radio (SIRI), SPY and the Q's are all in relatively decent shape at the moment though I may have the most difficulty with further adjustments on the Q's. I like the relative protection of spreads at market times such as these.
The iron condor on the Russell 2000 (RUT) continues to do well as the price remains between the short stikes which is exactly where I want it to stay. Since I sold nothing but time value when I opened these positions for a strong credit, the trade has been gaining paper profit with the passage of time.
In light of the market tenor, I am still satisfied with the puts on Safeway (SWY).
In the Newsletter this weekend, I mention the possibility of a straddle on Silicon Laboratories (SLAB). I like the relative low implied volatility and the fact that it is below statistical volatility. I would prefer to enter if the stock price were closer to a stock price, but I may look at putting on a delta neutral position rather than a straddle with an equal number of puts and calls.
Have a great weekend. We are heading for our winter grounds tomorrow and will be back in business when the market opens Monday.
Bill
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