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stock trader, stock option
[Weekend Summary}
Dear Member:
The markets do not yet look ready to turn back to a sustained bull to me. In fact, the Dow, Nasdaq, and S&P 500 have each formed a head and shoulders on the daily line charts which I consider to be bearish. There still has been no real capitulation so I expect a greater liklihood of downside movement before we see any sustained rally. If the S&P does not bounce in February, it will be the first time since 2002 that it has been down 4 straight months. All of that means to me that the inclination will be to bearish plays with only very careful selectivity leading to bullish entries in my own portfolio.
The good news for Option Trader is that the continued downward movement is very positive for my bearish spread on the "Diamonds" (DIA) and for the short leg of my spread on SPY.
I did add a March iron condor on Lehman Brothers (LEH)as it continues to channel between the 50 and 65 range. That one brought in a healthy influx of cash and I can keep all of it as long as the stock trades between 50 and 70 and I make no adjustments until expiration.
The spread on Sirius Satellite Radio (SIRI)also continues to do well so pretty good news overall this week for Option Trader.
I'll be speaking on the subject of the subtitle of "Trade Your Way to Wealth" which is "Earn Big Profits with No-Risk, Low-Risk, and Measured-Risk Strategies" at Traders Expo at the Marriott Marquis, Times Square on Sunday the 17th. Hope I see some of you there. The Expo is free.
Bill
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