Archive for January, 2009
The Market Should Close Near The High Of The Day - Sell OTM Put Spreads!
Yesterday, the market was able to close in positive territory. That is a good sign and a bid has materialized. After a nasty decline a week ago, the market opened lower Wednesday, Thursday and Friday. Each of those days the losses were erased. The market has follow-through and the price action is bullish again today. Advancers outnumber decliners by a 2 to 1 ratio and I believe we will grind higher into the close. Most of the financials have reported and some of the fear has been removed. Today, Zions Bank reported decent earnings and it demonstrates that within the financial …
Support Is Holding and the Market Is Treading Water - Sell OTM Put Spreads!
Yesterday, the market was able to ward off early selling that resulted from weak earnings and economic data. Microsoft released its earnings prematurely and they missed their EPS by two cents. PC sales were much weaker than expected and that weighed on the results. Initial jobless claims came out much higher than expected and they stand at the highest level since 1982. In the face of such negative news, the market was able to pare losses by the close. Today, we are seeing a similar pattern. The market opened on a very weak note when General Electric announced a 44% decline …
Weak Earnings Are Pushing The Market Lower Today!
Yesterday, the market gradually started to recover from its big loss on Tuesday. As the day progressed, the buying picked up and we had a full-blown rally on our hands. Unfortunately, that was a one-day event and those gains are being stripped away this morning. The bad news started with higher than expected initial jobless claims. They now stand at a seasonally adjusted 589,000. That is the highest level since 1982. Continuing claims increased by 97,000 and they stand at a very concerning 4.6 million. Unemployment is the most critical piece of information. It will determine the depth and duration of …
Earnings Will Support The Market Today - Sell OTM Puts and Put Credit Spreads!
Yesterday was one of the strangest days I can recall. On one hand, you had a nation celebrating the inauguration of a new President like never before. Hope and optimism electrified the nation. On the other hand, the issues confronting our new President caused the market to plunge. Financial stocks have been releasing earnings and the outlook is grim. A few weeks ago, Goldman Sachs forecasted that $1.6 trillion of new capital would have to flow into financial institutions to keep them viable. They also stated that this was a conservative estimate. Now it seems as though they were correct. The …
Video of a Real-Life Trade (Part #1)
For the past few years I’ve been writing covered calls and making 3-15% every single month.
It’s a relatively simple strategy with predictable results. So I use it regularly. (…)