Well, that was a pretty rotten week on the whole and, since I’m way behind, let’s not dwell on it…
We are generally back below where we started the year, which is really pathetic but a huge opportunity for those of us who missed the rally.
I’m not saying we should jump in now but I am saying to keep a close eye on what specific worked best from Jan 1-9 and look to get back on those horses if their sectors start coming back.
If you heeded my advice and moved into cash over the past two weeks you have lots of money you are itching to invest and it looks like there will be plenty of opportunities – when the market turns – but we must wait patiently for the signs!
Gold stocks pulled back today indicating things just can’t be that bad but they really are that bad and many of these stocks could become a major buying opportunity if they continue to pull back.
=====================================
Our 1/13 TOTD # 1 PFE held up and remains strong, not losing money is good for a week like this!
1/13 TOTD #2 NKTR also ended flat and remains strong, the Feb $20 calls have actually increased 50% in value (go figure!).
TASR held up surprisingly well, we need to watch it around the 200 dma of $8.50 for real signs of life.
ATYT pulled back again to my magic buy target of $16.50 so buy back the $17.50s if you sold them for a nice 66% profit!
MCD has exceeded all my hopes and expectations, blowing away the rest of the market last week by going up every single day! The March $32.50s selected on Thursday are already up 20% and this stock looks very nice indeed.
Friday’s TOTD BUD was a no-trade as the market opened down but I still like the Jan ’08 $45s for $3.40, this is a patience trade but, like all stocks should not be held if the market looks like it’s collapsing.
Friday’s SBUX spread was a stroke of genius, with the $30 put already up 70% and the $32.50 call down just40%! You could take the 30% and run (not bad for a day) but we did buy this for earnings so let’s just watch it a bit.
Speaking of spreads – the DIA spread we played on 1/10 has paid off huge with the Feb $110 puts up 260% at $3.50 and the $111 calls holding on to .15 for a net gain of $1.20 (50%)! This is why hedging is good, even when things look good, like they did on 1/10… I say take this trade off the table by selling the puts and leaving the calls just in case the market comes back. I don’t think the downside on the Dow goes much below 10,500 and 50% is a lot of money!
