[Weekend Summary]
Dear Member:
Volatilities were down a bit today, but have continued to be pretty wild which often signals market decline. Today the Nasdaq Composite and the S&P 500 reached up near the top of the consolidation channel that began this month. The Dow was up strongly today, but has not yet broken up through the down trend line though it is now bumping its head in that area. In short, there is not yet a signal that the bear has gone to hibernation even in spite of the Fed's yeoman efforts. That is not to say, however, that things aren't starting to look a little more positive for the bulls. As of Thursdays close, they are. Of course, some consideration must be given to the possibility that the markets moved higher today with short covering in anticipation of the long weekend. If the markets can steam up early next week the growling bear may be ready for a rest, even if temporarily so. I need to see a break above the recent channel for the Nasdaq and S & P and a break up through the down trend line to become a real believer.
Option Trader had an active week. I closed profitable trades in The Blackstone Group (BX) and Companhia Siderugica (SID) for respective gains of about 28% and 14% in 5 weeks and 3 weeks. I also closed the short leg of my spread on SPY for a 71 cent a share gain, retaining 71 cents of the initial 73 cents for which I originally sold that leg.
The remaining legs of my condor on Lehman Brothers (LEH)expired worthless (a good thing here), but the overall trade suffered a modest loss. I think this is the first losing condor in quite some time and I opened a new condor on the Russell 2000 with an April expiration, selling the 740 calls and the 630 puts and buying the 750 calls and the 620 puts as the protective legs for a net credit before commissions of $2.90.
Depending on market movement, I'll be looking to sell more calls against my long leg on SPY. The spread on Sirius Satellite Radio (SIRI) remains fine for now.
I hope you enjoy your weekend.
Bill
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