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[Weekend Summary]
Dear Member:
The markets bounced up nearly 5% for the week on generally increasing volume though the volume did fall off just a little today for the Dow and S&P 500 while jumping a bit on the Nasdaq Composite. The Dow and S&P finished right at an area of resistance. The Nasdaq bounced off a level of support with the huge news of Microsoft's (MSFT) offer to buy Yahoo (YHOO) for more than a 60% premium over the close on Thursday. It remained a stock pickers market in this earnings season, though, as evidenced by Google's (GOOG) nearly $50 a share fall today.
Option Trader had a decent week, closing the Mbia (MBI) bullish spread today for a 22.7% return on risk before commission in only three weeks. That is about 1% a day. I also was able to close my put trade on Salesforce.com (CRM)in a one day trade that brought in a 5.2% gain before the commission.
If the Dow and S&P can break through the resistance where they came to rest today, I will probably be adjusting both spreads (on the DIA and SPY). Buying back the short legs on those positions would likely result in losses on those legs which could be overcome by continuing to hold the long legs. The DIA spread may be more difficult to turn since there are only two weeks left to expiration, but in any event the risk initially taken was not very great.
Sirius Satellite Radio (SIRI) moved up sharply for a cheap stock and that spread continues to look just fine for now.
Have a great weekend.
Bill
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